Palm oil had been trading weaker recently on the back of higher then expected stockpiles showing that demand was still weaker then expected. But with continued tales of dry weather in Asia it was only time before prices started to rise again. Its taken crude oil prices heading up to trigger this but Palm oil is once more heading up. Crude itself has risen on the back of lower then predicted stockpiles as well. There is another consideration in that high mandated percentages of Palm oil in bio-fuels should start to kick in soon which could increase demand. In reality dry conditions now are not likely to impact crops till the end of the year but it will give the market some direction which at the moment is most likely up. Coconut oil remains very weak at the moment as supply remains strong.
But again whilst current dry conditions are not likely to have any impact till end of the year its still going to add pressure.
We are starting to see prices for desiccated firm up just a little. Tales of slow supply of raw nuts has seen prices in Indonesia firm up slightly. The bigger effect has been shippers there reducing just how forward they will offer. Some Indonesian shippers will now only offer for the next couple of months. Philippine shippers are also now not keen to offer too far forward with few offers after September shipment. It all looks like a market gearing up for prices to rise.
