James Fry, leading industry analytic expert, has estimated that prices of vegetable oils – especially palm oil – are set to increase by June 2019, according to Reuters' report. Fry estimates that the vegetable oil prices could increase by around $50-$100 a ton.
"Prices of crude palm oil and other oils depend on the outlook for palm stocks. Stocks will fall till mid-year, which will lift the crude palm oil premium over Brent, especially if Indonesia maintains its heightened pace of biodiesel use.
If this occurs, there is an upside of $50-$100 for oils by June," Fry is said to have pointed out recently. Fry also said that the variation in the prices of vegetable oils was because of the variations in the crude oil prices globally.
Indonesia is the largest producer of palm oil and its production was around 3.9 million tonnes in November 2018. In July 2018, Indonesia palm oil production had risen to a peak of around five tonnes. The Southeast Asian country had issued a stipulation in 2018 that the diesel fuel produced in the country would contain bio-diesel.
This was mainly done to ensure that there was an increase in the usage of palm oil in the country. Fry's estimates follow the two-months slump of global palm oil prices in November and December 2018.