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By Rajendra Jadhav
MUMBAI, July 30 (Reuters) - Palm oil prices are likely to recover in the second half of 2019, helped by a slowdown in production growth and rising demand from the biodiesel industry, leading industry analyst Thomas Mielke said on Tuesday.
“The combination of accelerating consumption for biofuels and food, and a slowdown in growth in palm oil production will keep palm oil prices higher for the rest of this year and in 2020,” said Mielke, editor of Hamburg, Germany-based newsletter Oil World.
Benchmark palm oil prices have shed almost 3% so far this year to a near four-year low at 1,916 ringgit earlier this month. Prices have since risen and closed on Monday at 2,061 ringgit.
Indonesia’s consumption of palm oil for biodiesel will rise by more than 3 million tonnes in 2019, taking total consumption to 14.8 million tonnes in the world’s biggest consumer of the tropical oil, he said.
Jakarta aims to increase the mandatory level of bio-content in biodiesel next year to 30%, known as B30, from 20%.
A decline in soybean crushing in China following a trade war with the United States could lift Beijing’s palm oil imports by 18.5% to 6.4 million tonnes in the 2018/19 marketing year ending Sept. 30, he said.
China’s soybean imports from the United States fell after Beijing slapped tariffs of 25% on American cargoes.
Mielke pegged Malaysian palm oil output at 20.3 million tonnes this year, up 4.1 from a year ago, according to a presentation at an industry conference in Mumbai. He forecast Indonesia’s production in 2019 rising 5.3% to 43.7 million tonnes.
Soybean production in India, the world’s biggest importer of edible oils, could fall 6.6% to 9.8 million tonnes in 2019/20 marketing year starting from Oct. 1, Mielke said, as low rainfall hit the oilseed growing region in central India. (Reporting by Rajendra Jadhav in Mumbai, Editing by Sherry Jacob-Phillips and Louise Heavens)