MPOC: Crude palm oil price to remain around $1.110/ton by June.

The Malaysian Palm Oil Council stated that the price of crude palm oil is expected to remain at around 4,400 Ringgit ($1,110), per metric ton, in June. This is because global biofuel policies are supporting demand and weather risks increase supply uncertainty.

The MPOC stated that the recent biofuel developments in America have improved palm oil's competitiveness on major markets. Malaysia will begin producing biodiesel next month with a blend of 15% palm oil, called B15. Meanwhile, Indonesia plans to increase its mandatory level of palm oil in biodiesel from 40% to 50% by July.

The council said that the vegetable oil price still has the potential to rise, and it suggested that recent price corrections were likely caused by funds or speculators who took profits.

MPOC stated that geopolitical tensions, and the rising risk of El Nino weather patterns continue to pose a threat to supply.

El Nino is known to bring drier than normal?weather conditions in Southeast Asia. This can reduce?rainfall, soil moisture, and affect regional agricultural production.

(source: Reuters)