KUALA LUMPUR: Palm oil futures could drop this year to their lowest level since February 2009 despite poor weather in the top growing countries and trade might also be volatile because of uncertainty in the global economy, senior industry officials said on Monday.
Unfavourable weather in top growers Indonesia and Malaysia could cause some tightness in supply but any El Nino phenomenon this year will be weak and therefore not as damaging to output as feared, the officials told a conference in Kuala Lumpur.
Malaysian palm oil prices, which set the tone for global prices, are expected to trade between 1,820 ringgit ($504) and 2,750 ringgit per tonne in 2015, said Ramli Abdullah, head of the economic unit of the Malaysian Palm Oil Board, revising the lower end of the range from the 1,800 ringgit given earlier in his presentation.
In October he had forecast a much narrower range of 2,300-2,500 ringgit for this year.
The April contract was trading at around 2,313 ringgit on Monday.Ling Ah Hong, director at Malaysian-based plantation research company Ganling Sdn Bhd, also doubted a weak El Nino would cause much disruption to palm oil supplies in Southeast Asia.
Ling said the absence of severe weather threats meant benchmark palm prices would be driven by global demand factors, oilseed supplies and crude oil prices.
Top grower Indonesia has experienced bouts of drought over the past two years that may curb output in 2015, while No.2 producer Malaysia was struck by its worst monsoon flooding in decades in December.
