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Thomas Mielke of ISTA Mielke said Malaysian palm oil production will drop slightly in 2020 from 20.5 million tonnes in 2019. He expected Indonesian output to slow growth to 45.4 million tonnes, and said global palm oil supply will fall short of demand.
China is also increasing vegetable oil imports due to lower domestic soybean crushing.
A forecast global palm oil deficit and rising Chinese import demand support higher vegetable oil prices. Tighter oil supply raises costs for oil-based feed ingredients.
malaymail.comNov 1, 2019After 149 past bullish report events, Palm Oil moved a median +0.5% over 5 sessions (57% higher; middle half -1.1% to +1.8%), and +0.8% over 20.
After 296 past bullish report events, Soybean Oil moved a median -0.0% over 5 sessions (49% higher; middle half -1.8% to +2.0%), and -0.5% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
ISTA Mielke's forecast of lower 2020 Malaysian output and a global supply shortfall supports higher prices via expected supply tightness.
Forecasts of lower 2020 Malaysian output and a global supply shortfall, plus rising Chinese vegetable oil imports, support higher prices.
ISTA Mielke's forecast of lower 2020 Malaysian output and a global supply shortfall versus demand supports the tightening-supply narrative on the move date.
