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He was addressing an even organized by the Malaysian Palm oil council here today.
Mistry however scaled back his earlier said forecast of 3,500 ringgit level as Bio fuel demand is not so strong.
Prices in Kuala Lumpur have retreated from an 18-month high in March to 2506 ringgit currently as rising output from Indonesia and Malaysia, the largest producers, add to record global cooking oil supplies. The failure of Indonesia and Malaysia to absorb additional quantities of biodiesel has disappointed palm oil prices, Mistry said.
"Production of palm oil has been better than expected since February," Mistry said remarked. "If the El Nino turns out to be mild and delayed, as many weathermen are predicting of late, palm oil production will turn out to be better than my earlier estimates." Production Forecast
Indonesia may produce 30.5 million tons or more this year while Malaysia's output will total 19.7 million to 19.9 million tons, more than the March forecast of as much as 19.7 million tons, said Mistry, who's traded vegetable oils for more than three decades. The two Southeast Asian producers together account for about 86% of world supplies.
He said his price outlook is based on the assumption that Brent crude oil will trade in a range of $100-$120 a barrel.
Palm has become far too dependent on biodiesel demand and that is an unreliable, opportunistic and sporadic market.
Palm's rally in March, caused by a dry period in Southeast Asia in February, reduced its appeal as a feedstock for biodiesel and discouraged its use in Indonesia, Mistry said. The country's use of palm biodiesel in the first five months of this year is roughly the same as in the same period a year earlier, and full-year consumption will not increase, he said.
"We are told this is due to a lack of infrastructure for blending and handling," Mistry said. "While this may be one reason, the real reason could be the high price of CPO and the lack of competitiveness of biodiesel in 2014."
Global demand for vegetable oils may grow by 5 million tons, including 1.5 million tons for biodiesel, while total supply will expand by 6.8 million tons in the 2013-2014 marketing year, Mistry said.
India may raise duties
India, the world's largest palm oil buyer, may raise the import duty on refined oils around September to put its refining and oleochemical industries on a level playing field, said Mistry. Palm oil has been losing market share in India with imports of soybean and sunflower oils rising in May, data from the Solvent Extractors' Association of India show.
