Crude palm oil futures prices are likely to trade on Bursa Malaysia in a range between Ringgit 2,300 and 2,500 a tonne until the end of April as the market has entered the low cycle phase of palm oil production. The market may turn more volatile if elections are called in Malaysia during the period, according to Dorab Mistry, Director, Godrej International.

Speaking at the Palm and Lauric Oils Price Outlook 2013, Mistry said after April, with the coming into play of bearish factors such as soya exports from South America, more clarity on US plantings and crop prospects in Europe, prices will be under pressure and CPO futures may decline to Ringgit 2,200 a tonne or even lower.

July-August will be a critical period for the market, he pointed out adding the futures prices may decline further and breach Ringgit 1,800 a tonne if Brent crude declined to $80 a barrel. As for soya oil prices, which are already at a discount on the forward positions, he forecast that by July it would be traded at $900 a tonne Argentina port.

Both sunflower oil and rapeseed oil will command a premium over soya oil, while the outlook for lauric oils was bleak, according to the expert.

Earlier, presenting a paper on price outlook with a hedging perspective, T. Gnanasekar, Director of Commtrendz Research, said the technical scenario pointed to crude palm oil prices trading in the Ringgit 1,900-2,700 range in the next two quarters. In the immediate context, prices will test 2,280-2,300 levels to hold for a rally higher to 2,700.

Chairman of Indonesian Palm Oil Board Derom Bangun, in his presentation, observed that as the global demand slightly exceeds supply, the price outlook for crude palm oil was not bearish. He saw the market moving slowly but steadily to $870-900 a tonne by June and to $900-940 in the second half of 2013.

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