Palm oil demand from China and India may rise

KUALA LUMPUR, Apr 23 (Reuters): Palm oil demand from top global buyers China and India is expected to increase as the vegetable oil is now reasonably priced compared to its rivals, the Malaysian Palm Oil Council (MPOC) said on Tuesday.

Palm oil is now considered "reasonably priced" at 3,900 ringgit ($889) per metric ton, the MPOC said in a statement, adding that prices are expected to remain supported at that level, underpinned by a recovery in soybean oil prices.

Crude palm oil had commanded a premium over crude soybean oil in the past year due to the tightening of supplies from supply disruption caused by floods.

MPOC said China is projected to increase its palm oil imports in May and June to replenish inventories, coinciding with the onset of the summer season, which typically sees higher palm oil consumption in the country.

"Similarly, India is expected to capitalise on the current low palm oil prices to replenish its depleted inventories, as the price gap between palm oil and soybean oil has narrowed in domestic market," it said.

Despite a production recovery seen in March, MPOC said total palm oil output could dip slightly to around 19 million tonnes

in 2025.