El Nino drives palm oil prices

2016: rising palm oil prices?

The palm oil production is about 90% on the islands of Malaysia and Indonesia instead. Tropical conditions with continuous high temperatures and rainfall to 2,000 mm are the prerequisites to achieve high oil yield per hectare. Measured on European rapeseed yields by an average of 1,500 to 2,000 kg of vegetable oil, the oil palm plantations can reach approximately three times. Can the once planted trees up to 35 years be harvest will be.

In the last few years are significantly increased production and closing stock at the same time something weaker export demand. Palm oil has a market share of rd 30% ahead of the soybean oil. Both products are considered leaders in the sector of vegetable oils. 2012/13-in the Aug. 2015 approximately 1,000 classes are $/ t je to below $450 per t please. Last low crude oil prices have put pressure on the Palm prices, because a considerable part of the oil is used in addition to the food, feeding, and cosmetic purposes for the production of biodiesel.

Lately the prices have started up and the threshold of $500 per t again exceeded. The production growth rates have declined in recent years. The seasonal peak of production is actually expected in the Oct. Reduced rainfall in some regions were the main cause.

For the upcoming period, however looking at the coming El Niño weather event. According to meteorological data is to be expected in this year of 2015/16 with a high intensity of the weather anomaly. The oil palm areas are located exactly on the route. The usual rain clouds from the Pacific Ocean here no longer reach the Malaysian and Indonesian islands under El Niño conditions and rain down on the sea before. The consequences are insufficient rainfall up to severe droughts in the plantations. The result of sharply falling revenues are up to 30% who are still detrimental in the subsequent period.

Expecting falling production volumes , prices of palm oil have risen last strong. Should the weather phenomenon actually entering the next month and stop by in the March 2016 drive could rapidly take palm oil prices. Would benefit also the competing vegetable oils and their raw materials. As a counterweight, the high amounts of offer from the soy sector are available. The comparatively small sector of rape is very close in this fiscal year.

Market experts expect that the palm oil prices well into the year 2016 , will develop a rather upward price trend.

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