Malaysian palm oil futures edged up at the close of trade on Friday, but remained largely caught in a range as demand remained tepid.
JAKARTA: A palm oil bull run could begin with Indonesia's production decelerating, even before palm oil output plateaus by 2021.
Coupled with rising domestic consumption, global supply will dwindle, driving prices higher. The shortage will affect the global edible oil balance as palm oil has the largest share with 31%.
Indonesia's structural output high should precede First Resources' 2021 production peak, as the Indonesian planter's trees are younger than the country's average.
Indonesia's palm oil exports fell to 68% of production in 2018 compared to 74% in 2017 as domestic demand rose, backed by favorable biodiesel economics.
Strong crude oil prices could help to sustain this trend. - Bloomberg
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