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Rabobank bullish on palm oil prices

14-Feb-2012

Palm oil prices may be poised to stay low in the short-term, notes Rabobank, but their long-term fundamentals remain bullish.

The downward pressure on prices for the critical food ingredient coincides with the seasonal low demand from countries such as China and India for palm oil imports from major exporters such as Malaysia, said the agri-commodity specialists.

“We see an increased upside skew to palm oil demand for the marketing year,” said the Rabobank analysts.

They question US Department of Agriculture (USDA)’s estimates on global soybean and rapeseed oil production levels, which the Rabobank reports calls inflated and the Dutch bank sees the supply of alternative vegetable oils as lower than the USDA predicts, thereby feeding into higher palm oil demand and prices going forward.