Palm oil futures traded on the Malaysia Derivatives Exchange could exceed RM3,000 a tonne "very quickly" because of a "strong" increase in consumption and production problems, an industry analyst said.
There was "a powerful bull market which has yet to realise its full potential," Bloomberg quoted Dorab Mistry, director of Godrej International Ltd, as saying yesterday in remarks prepared for an industry conference in Tokyo. Palm oil traded yesterday in Malaysia at about 14% less than Mistry's target threshold.
India, the largest consumer of palm oil after China, may boost consumption of all vegetable oils to 12.8kg per head per year in the 12 months to October, about 12% more than the year before, Mistry said in the remarks. Godrej is one of the largest importers of edible oils into India.
"Price-conscious markets like India will chase palm," he wrote in the address, saying there had been a "phenomenal" rise in the nation's usage of vegetable oils. "India's imports of vegetable oil will continue to exceed the previous year's."
Meanwhile, ECMLibra Investment Research remained overweight on the plantation sector, but was looking to review its call on the sector depending on production expectations at home and soy market developments abroad.
It downgraded IOI Corporation Bhd to a sell as the current price had exceeded its RM4 target price, after the plantation group reported results that were slightly below its expectations but within consensus.
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