A world leading vegetable oil manufacturer predicts the price of crude palm oil (CPO) will rise throughout the year and into 2009 on consistently growing supply and demand.
Director of India's Godrej International Limited, Dorab E. Mistry, said the price of CPO would increase from the current US$1,181 (Rp 11 million) per ton to $1,243 by the end of June and that the price would continue to rise through the end of 2008.
"At some stage between September 2008 and February 2009, bleached and deodorized Palm Oil (a product of CPO) will go to up to $1,398," Dorab said after the closing of the world palm oil summit and exhibition in Jakarta on Friday.
As of last month, the average international price of CPO was $1,158 per ton. In 2007, the price averaged $780 per ton, or nearly double 2006's $477 per ton.
Dorab said worldwide CPO production would rise by 4 million tons this year as the commodity continued to attract new investors, and that a September production peak would see prices rise further.
He said Indonesia, the world's largest CPO producer, would account for at least 85 percent of global production next year, while this year the country accounts for 45.2 percent, with Malaysia the second largest with 42 percent.
He said China and India would continue to increase demand for the product. China's CPO imports grew 26 percent in the first quarter of 2008 and India's by 17 percent in the same period.
"The demand from Europe and the U.S., meanwhile, will be driven by a growing need for biodiesel, which will grow from 1 million to 1.5 million tons this year," he said, adding that his predictions depended on increasing CPO prices, which another expert said were set to collapse.
James Fry, managing director of LMC International Ltd., said CPO prices would fall on a decline in the price of crude oil, which he also predicted.
"Much of the demand for biodiesel is tied to fuel prices via biodiesel incentives... such as the U.S.' $1 per gallon credit," James said, referring to a U.S. policy on subsidizing biodiesel producers at a rate of $1 per gallon of vegetable oil blended with fossil fuels.
James said fuel prices would then decrease due to ample oil reserves.
The United States recently boosted its reserves from 540 million barrels to 702.7 million barrels. In May, the Organization of Petroleum Exporting Countries promised to increase production by 300,000 barrels per day.
http://www.thejakartapost.com
Director of India's Godrej International Limited, Dorab E. Mistry, said the price of CPO would increase from the current US$1,181 (Rp 11 million) per ton to $1,243 by the end of June and that the price would continue to rise through the end of 2008.
"At some stage between September 2008 and February 2009, bleached and deodorized Palm Oil (a product of CPO) will go to up to $1,398," Dorab said after the closing of the world palm oil summit and exhibition in Jakarta on Friday.
As of last month, the average international price of CPO was $1,158 per ton. In 2007, the price averaged $780 per ton, or nearly double 2006's $477 per ton.
Dorab said worldwide CPO production would rise by 4 million tons this year as the commodity continued to attract new investors, and that a September production peak would see prices rise further.
He said Indonesia, the world's largest CPO producer, would account for at least 85 percent of global production next year, while this year the country accounts for 45.2 percent, with Malaysia the second largest with 42 percent.
He said China and India would continue to increase demand for the product. China's CPO imports grew 26 percent in the first quarter of 2008 and India's by 17 percent in the same period.
"The demand from Europe and the U.S., meanwhile, will be driven by a growing need for biodiesel, which will grow from 1 million to 1.5 million tons this year," he said, adding that his predictions depended on increasing CPO prices, which another expert said were set to collapse.
James Fry, managing director of LMC International Ltd., said CPO prices would fall on a decline in the price of crude oil, which he also predicted.
"Much of the demand for biodiesel is tied to fuel prices via biodiesel incentives... such as the U.S.' $1 per gallon credit," James said, referring to a U.S. policy on subsidizing biodiesel producers at a rate of $1 per gallon of vegetable oil blended with fossil fuels.
James said fuel prices would then decrease due to ample oil reserves.
The United States recently boosted its reserves from 540 million barrels to 702.7 million barrels. In May, the Organization of Petroleum Exporting Countries promised to increase production by 300,000 barrels per day.
http://www.thejakartapost.com
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