MALAYSIA OUTPUT MAY FALL TO 19.8M TONNES
Prices set to pick up moderately to RM2,500 in next six months, says Oil World
MALAYSIA’S palm oil output is expected to drop to 19.8 million tonnes this year, compared with 19.92 million tonnes last year, due to lower yields, said Oil World executive director Thomas Mielke.
“Yield trend is declining. There was a strong recovery in production last year and the first four to five months of this year, but it is temporary.
“It’s not continuing,” he said at the Malaysian Palm Oil Trade Fair and Seminar 2018, here, yesterday.
He had earlier forecast annual production would rise to 20.2 million tonnes, adding that yields were expected to decrease to 3.87 tonne per hectare this year, from 3.94 per hectare last year.
However, Mielke said Malaysian palm oil production was expected to increase to 20.4 million tonnes next year due to high inventory numbers and the fact that the country was not badly hit by El Nino this year.
Globally, he said palm oil production was expected to rise to 70.22 million tonnes this year, from 67.94 million tonnes last year, and increase further to 72.69 million tonnes next year.
Mielke said palm oil prices were expected to pick up moderately to RM2,500 a tonne in the next six months.
He said the current weak prices was due to lower-than-expected imports globally.
“Palm oil prices declined more than expected and approached a 10-year low lately. This is partly a result of a plunge in world imports by 0.6 million tonne in April to July this year, from a year earlier.
“But with current stocks low in many importing countries, purchases have to pick up in the months ahead.”