Fry, whose forecasts are closely watched in the palm oil industry, said at a conference on Indonesia's Bali island that he expected prices for the vegoil used in everything from soap to cookies could then surge on to $750 per tonne in the second quarter.
In September, Fry had estimated European crude palm oil (CPO) prices to rise to $620 per tonne, or $570 on a free-on-board basis, by the second quarter of 2020.
"The very recent leap in CPO prices has made a large part of the price adjustment that I thought would only occur in early 2020," Fry said, addressing the conference.
"This price readjustment happened because the outlook for CPO output is definitely less upbeat than one might have expected from maturing areas planted during high price years," he said.
CPO prices in Rotterdam closed at $660 per tonne
Drought, haze, and a cutback in fertilizer use has led to lower-than-expected output, he said. Meanwhile, government mandates ordering more use of palm oil in biodiesel in Indonesia, Malaysia and Thailand will stoke demand growth.
Indonesia, the world's palm oil producer, is targeting implementation of a mandatory 'B30' programme - meaning biodiesel with 30% biofuel content - from 2020. That represents expansion from the current 'B20' mandate for 20% biofuel content.
Malaysia increased its biodiesel mandate from 7% to 10% last December, and aims to implement a 'B20' programme in 2020.
"As a result, the growth in world (palm oil) output in 2020 will be overtaken by the growth in demand," Fry said.
Indonesian biodiesel demand will rise to 8.5 million tonnes next year, he said, predicting the country's exports of the fuel would be very limited.
Should Indonesia implement its 'B30' programme in full, Fry said, CPO prices will increase to levels at which sunflower oil could become an alternative to palm, especially in India where import tariffs are imposed on palm oil.
(Reporting by Fransiska Nangoy; Editing by Kenneth Maxwell)
