World coconut oil trade is likely to fall by 4 percent in 2006/07 because of an expected drop in exports from major producer Philippines due to domestic biodiesel consumption, oilseeds analysts Oil World said.
The Hamburg-based analysts forecast on Tuesday that global coconut oil output would decline marginally to 3.27 million tonnes in 2006/07, while output of its main competitor, palmkernel oil, is seen up by 6 percent to 4.46 million tonnes.
Large quantities of coconut oil are expected to be absorbed by the Philippine biodiesel industry, which would curb the country's export potential, Oil World said.
"Based on these assumptions we forecast a boost in palmkernel oil trade by 16 percent this season, with higher import demand expected mainly from the EU, the US and China," it said.
"By contrast, we forecast a 4 percent drop in coconut oil trade and anticipate a setback primarily in US imports." Oil World said that coconut oil had maintained a price premium of about $40-$50 per tonne over its competitor in recent months because of larger supplies of palmkernel oil. The gap in prices has stimulated stronger demand for palmkernel oil.
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