Dropping palm oil prices blamed on market flooding, but is a rebound ahead?

August 28, 2014 |

In Southeast Asia, palm oil prices are expected to drop to near-production levels, the lowest since 2009. Futures have fallen to the lowest close in more than five years. According to Dorab Mistry, director at Godrej International, “We know from experience that during bear markets, the price tends to gravitate toward the cost of production.” According to BusinessWeek online, palm entered a bear market last month on swelling global supplies of edible oils, including what is set to be a record soybean harvest in the U.S.

UBS AG, Standard Chartered Plc and CIMB Investment Bank Bhd. are among forecasters seeing a price rebound, and futures trade higher in 2015 than for delivery in November, the most-active contract at present.

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Category: Fuels

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