KUALA LUMPUR: Prices of palm oil and other commodities may see a decline in the second half of the year as a possible stagflation and recession squeeze demand, leading analyst Dorab Mistry said on Wednesday.

       Crude palm oil futures are likely to decline to 5,000 ringgit ($1,196) a tonne and eventually to 4,000 ringgit by September, Mistry, director of Indian consumer goods company Godrej International, said at an industry conference in Kuala Lumpur. Prices are currently just under 6,500 ringgit.

       However, strong biodiesel production and demand will prevent vegetable oil prices from dropping too much, he added.

       Mistry forecast Malaysia's 2022 palm oil production higher at 19 million tonnes, while Indonesia's output is seen rising by at least 2 million tonnes.

       Surging energy and materials prices in the wake of Russia's invasion of Ukraine are stirring fears of stagflation, the combination of rising inflation and slowing economic growth. - Reuters