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MUMBAI: Malaysia’s palm oil production is likely to rise next year as more plentiful labour and the maturation of plantations for harvesting offset the impact of the El Nino weather pattern, the Malaysian Palm Oil Board (MPOB) said on Thursday.
Production in the world’s largest palm oil producer after Indonesia plunged 20% during a 2016 El Nino event, but the impact this year has so far not been severe, said the regulator’s director-general, Ahmad Parveez Ghulam Kadir.
The forecast reverses the MPOB’s May prediction that 2024 production could drop between 1 and 3 million metric tons. “We don’t really see a very strong or serious negative effect of El Nino so far,” Ahmad Parveez told reporters on the sidelines of an industry conference in Mumbai.
El Nino is a warming of Pacific waters that typically produces drier conditions over Asia, curbing the output of some crops.
“We are anticipating higher production in 2024 than this year because of better labour availability, and some of the new areas would start yielding,” he said.
Palm oil planters were forced to let thousands of tons of fruit rot for a third straight year in 2022 as a worker shortage prevented companies from increasing harvesting during the peak production season.
Malaysia’s crude palm oil production in 2023 was expected to rise to 19 million tons from last year’s 18.45 million tons, Ahmad Parveez said.
Palm oil posts biggest gain in six weeks on stronger rivals
But year-end stocks would remain near last year’s 2.2 million tons due to rising exports, he said.
Exports were forecast to rise to 16.3 million tons in 2023 from 15.7 million tons last year.
Palm oil, used in everything from cakes to shampoo to cleaning products, competes with soyoil, sunflower oil and rapeseed-canola oil, produced mainly by Argentina, Brazil, Russia, Ukraine and Canada.
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