Palm oil prices in Malaysia next year may trade on average 32% lower than current levels, partly because of oversupply and fading demand for biofuels, CLSA Asia- Pacific Markets said.
Palm oil will probably fetch 1,000 ringgit (US$278) a ton in '09, and 1,250 ringgit in '10, analysts at CLSA Asia-Pacific Markets in Kuala Lumpur said in a report. The '09 forecast is 64% lower than this year's projected average of 2,750 ringgit, James Gruber, a Kuala Lumpur-based analyst at CLSA, wrote in an e-mail today.
"Serious oversupply issues will take time to resolve," the brokerage said in the report. "The biofuels story is waning, providing less demand support."
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