Palm oil prices are likely to remain supported at current high levels because of biofuel demand, Hamburg-based oilseeds analysts Oil World said on Tuesday.
"The market sentiment has clearly changed," it said. "A few weeks ago the focus was still on relatively large Malaysian palm oil stocks which kept a lid on prices."
"In the meantime the attention has shifted more towards the non-food demand that is likely to unfold in 2007, when a number of new biodiesel plants will come on stream in Malaysia and elsewhere."
"At the moment, the volume and timing of usage in this sector is still subject to speculation, but this factor will keep prices well supported in the foreseeable future."