Malaysia’s palm oil production seen falling in 2024 due to El Nino — MPOB

Malaysia’s crude palm oil production could drop between one and three million tonnes next year due to the El Nino weather pattern, the Malaysian Palm Oil Board (MPOB) said on Thursday (May 25).

El Nino was unlikely to affect production this year as it takes about 15 to 18 months for the impact on production to show, the regulator’s director general Ahmad Parveez Ghulam Kadir told reporters.

Production in the world’s second largest producer plunged 20% during the 2016 El Niño event, but it should be less severe this year due to better planting material and improved labour conditions, Ahmad Parveez said.

A three-million tonne decline would be the worst-case scenario, with most of the impact expected to be seen in larger producing states Sabah and Sarawak, on Borneo island, he said.

Ahmad Parveez said Malaysia’s benchmark crude palm oil price was forecast to rise to between RM3,800 and RM4,000 a tonne due to the change in weather.

Production in 2023 was estimated at 19 million tonnes, versus 18.45 million tonnes last year.

The average price forecast for 2023 was maintained at RM4,200 a tonne, he added.