Growing stocks in both Malaysia and Indonesia will push down Palm oil prices as demand remains poor and stocks growing in both Malaysia (2.3-2.5 Mil MT) and Indonesia (4.7-5.2 Mil MT). Exports keep falling and last Aug Indonesia exports dipped to 2.0Mil MT nearly 1.5 Mil MT below previous month as seasonal shipments came down significantly mostly because of China. Seasonal means that Q4 will be difficult at best as Palm is simply not a winter product and exports typically slow. We are already hearing of China washing out Soybean contracts from Brazil because of demand concerns. Demand picture is simply not going to end the misery here. We need to price POGO into lower values to price it into gasoil and/or Indonesia need to ramp up mandate to 40% of diesel consumption making Indonesia the unequivocal leader in Biodiesel blending Globally.
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