Palm oil production in Malaysia to exceed 19mil mt next year, says analyst

Malaysia palm oil production is expected to surpass 19 million metric tonnes (mt) in 2025 in the event of a strong La Nina, said an analyst.

Fastmarket Palm Oil Analytics senior analyst Sathia Varqa said the palm production is in a high cycle now and is likely to peak between August and October this year, keeping prices under pressure.

Palm prices are expected to remain stagnant between RM3,700 and RM3,900 per tonne on the crude palm oil (CPO) futures, as the state of production will be the main price driver for the rest of the year,

 Sathia said at the East Malaysia Palm Oil Forum in Kuching, Sarawak yesterday.

In his paper Palm & Laurics Market Outlook, he noted that exports could be lower in August and September, and pick up pace in October.

Price competitiveness, a stronger ringgit, and China’s domestic policies are key determinants, he said.

On the Malaysia CPO market from January to August this year, he said the commodity showed an impressive rise in production, although it was uneven.

Export rose but this was not to China, he said.

There was no major weather disruption but some plantations reported a lower output from El Nino, he said, adding that high levies and taxes in Indonesia benefitted Malaysia.

He also noted that palm oil has recovered its competitiveness vis-a-vis bean oil.

Tags: Malaysia, palm oil, crop forecast