The increase in palm oil production collapses, prices in the market

European analysts forecast that in the fourth quarter of 2017 world palm oil prices may fall 20% due to the resumption of oil production after last year's drought, which was caused by the phenomenon of El niño.

According to experts, the quotations of palm oil in Malaysia may be reduced relative to the current March prices 720 $/ton 16% to 605 $/ton in the third quarter, and 23.7% to 550 $/ton in the fourth quarter.

operators of the market consider that thanks to improved weather conditions, palm oil production in Malaysia and Indonesia to 2017 will increase by 11 percent to 65 million tons, compared to 58,3 million tons this year. These two countries provide 80% of the world production of palm oil.

currently, palm oil prices are at a high level, as the reserves at the end of February amounted to only 1.47 million tons, the lowest level in the last 6 months.

Falling prices for palm oil will lead to lower prices for other vegetable oils, whose prices are now for March deliveries on FOB are:

• soybean oil - 765 € /ton,
• canola oil – 815 € /ton,
• sunflower oil – 775 $/ton for March deliveries ex-tank six ports option.