MUMBAI (May 8): Malaysian palm oil is expected to trade between RM3,700-RM4,300 per metric tonne from now until June, as tight supplies are seen offsetting weak demand, leading industry analyst Dorab Mistry said on Wednesday.

On Wednesday, the benchmark was trading at around RM3,900 per tonne.

"May will be the tightest month for palm oil," said Mistry, the director of Indian consumer goods company Godrej International, at a price outlook conference in Dubai.

The path of palm prices in the coming months will depend on palm oil production in top producing countries and weather in key soybean-producing North American countries, he said.

"Any weather problem in North America will light a deadly fuse," Mistry said.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

In March, Mistry had forecast palm oil expected to trade between RM3,900-RM4,500 per tonne from now until June.

Mistry trimmed the upside in prices as demand was subdued in the last few months due to supplies of rival oils at competitive prices.

Sunflower oil supplies from top producers Russia and Ukraine were higher than expected in 2023, eating into the market share of palm oil due to lower prices, he added.

On Wednesday, he reiterated that 2024 palm oil output is likely to fall by one million metric tonnes in the world's biggest producer Indonesia and remain stagnant in second-biggest producer Malaysia.

Global vegetable oil demand from the food and energy sectors is expected to rise by six million metric tonnes in 2023/24, but supplies are projected to increase by 4.1 million metric tonnes, he said.

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