SIEM REAP, Sept 3: Malaysian crude palm oil futures higher about 18 per cent to 2,900 ringgit ($844.5) per ton by December on strong demand and lower output yields, top industry analyst Thomas Mielke said on Wednesday.

Global demand for palm oil is going to pick up due to the very wide price discounts of palm oil relative to soyaoil and other vegetable oils. Palm oils discounts are unusually high at the moment whatever locations you take, he said.

Malaysian crude palm oil futures edged down 0.5 percent to 2,451 ringgit per ton on Wednesday as crude oil fell closer to the crucial $100 marker, weighing heavily on vegetable oil markets from China to the United States, traders said.

Palm oil supplies have been on the rise in recent months due to the high output cycle in top Asian producers Malaysia and Indonesia.

A Reuters poll on Tuesday showed Malaysia’s August palm oil stocks are expected to edge up 1.2 per cent from a month ago as production could hit its highest level so far this year and outstrip export growth. But Mielke said the upswing in production was likely to ease off by the end of the year.

Last week, another analyst Dorab Mistry said Malaysian crude palm oil output forecasts of 17.4 million tons could be comfortably exceeded while Indonesia’s output will rise beyond 19 million tons.

The Indonesian Palm Oil Producers Association is forecasting 18.6 million tons this year. Mielke noted export trend was slowly gathering pace for the vegetable oil, which is used in products ranging from sweets and soaps to biofuel.

Palm oil has become interesting again as feedstock for energy. Palm oil exports from Malaysia and Indonesia since July are increasing, he said.

Shipments of Malaysian palm products rose by up to 8 per cent in August to nearly 1.5 million ton s, data from cargo surveyors show.

In July exports had jumped as much as 27 per cent to about 1.1 million tons, snapping two straight months of declines.

—Reuters