Malaysia sees palm oil price recovery

Malaysian palm oil stocks are unlikely to touch the critical 1.5-million-tonne mark in the coming weeks as feared earlier and prices are expected to stage a recovery shortly, a senior trade official said Thursday.

He said palmolein oil prices may move up by at least US $15 per tonne in the next one month.

Malaysian palm oil prices have been on a downslide this year due to burgeoning stocks as exports have not kept pace with output.

The 1.5-million-tonne figure is considered a benchmark with stocks beyond that level widely perceived as very bearish for the market.

"I do not think stocks will reach the 1.5-million-tonne level. They are at 1.4 million tonnes currently and are now likely to decline on the back of higher exports and lesser output," R Sukumaran, general manager, Ngo Chew Hong Edible Oil Pte Ltd., told Crisil MarketWire.

Singapore-based Ngo Chew Hong is one of the world's largest edible oil refining and trading companies dealing with around 2.5 million tonnes of oil and oil products annually.

It is eyeing India for expanding its operations. Sukumaran said industry was expecting a pick-up in demand early next year and this will help shore up prices.