Palm oil prices in Europe were lower on Friday, erasing some of the market's sharp gains earlier in the week, on forecasts that production should rebound and the view that the run-up in prices had been overdone. Sellers of RBD palm olein cut offers by $7.50 to $12.50 per tonne, with January/March shipment last traded at $667.50, down $10 from Thursday. Crude palm oil prices were $5 to $15 a tonne lower.
The increase in prices this week had been driven by lower production and declining inventories related to an El Nino weather pattern. Production should rebound, however, in the upcoming 2016/17 season (October/September). Crude palm oil prices are expected to drop about 19 percent over the next two months as production recovers in the new oil year, a leading industry analyst, Dorab Mistry, said on Friday. EU rapeseed oil offers were cut by 2 to 5 euros a tonne hurt by weakness in rival vegetable oil markets. CBOT soyaoil prices fell with the most active contract down 1.75 percent at 33.61 cents per lb at 1646 GMT. Sellers also lowered asking prices for coconut oil and palmkernel oil.