Demand lifts oil for now

An increase in demand for Palm oil during the first ten days of May has lifted prices. Coming just when the lean season is coming to an end though any upside is being limited by big stocks that will only get bigger. Can demand though outstrip supply? Global crude oil prices have been a little weaker as production in US picks up as prices rose to the $65 level. Most are keen to see Indonesia implement more Palm oil in their biofuel blend which will help increase demand for Palm as crops increase. Coconut oil has tracked the Palm oil rally for now with prices hovering over the $1100 level.

Desiccated prices have been firm in the last week as demand picks up. Tales of El Nino have only extended buyers interest as some look to cover out much further to secure current prices. Whilst its unclear if edible oils have hit bottom yet, some buyers are not willing to chance things so prefer to book now ahead of any potential increases that might occur if oil prices start to firm up. Also a factor to consider is that really from June we normally see buying start to pick up for the last quarter production.