The most-used vegetable oil is expected to trade between RM4,000 and RM4,400 per tonne during the October-February period, before slightly dropping in March, Mistry, director at Godrej International Ltd, said at the Globoil conference on Saturday.

Futures have averaged RM3,908 so far this year, according to data compiled by Bloomberg.

Higher benchmark prices may potentially curb purchases by top importer India in the coming months as its festive-season buying will almost be over by next month.

Malaysian stockpiles may swell further going forward, after surging 25% in August from a month earlier.

Palm oil prices will be underpinned by Indonesia’s biofuel mandate and higher export taxes, Mistry said.

Indonesia last month raised its palm oil export duty for September to US$166 (RM695) a tonne from US$93 (RM389) a month earlier following a rally in the tropical oil.

Any move by Indonesia to increase its export tax generally boosts demand for Malaysian palm oil and supports futures in Kuala Lumpur.

Mistry said benchmark prices may slide to RM3,200-RM3,800 during April to September on expectations of favourable weather conditions for oil palm trees.

The commodity has jumped more than 23% this quarter, mainly on supply concerns and a rally in soybean oil, palm’s closest food and fuel substitute.

Other main points from Mistry’s presentation were that palm oil production in Malaysia will recover only after Ramadan (April) next year, with output seen rising to 19.2 million tonnes in 2022 from 18.2 million tonnes this year on easing labour shortage. Indonesian output is expected to rise by at least one million tonnes.