Malaysia’s palm oil production to grow in 2024 despite El Niño

Malaysia’s palm oil production is likely to rise next year as an increase in the labor force and normal maturation of oil palm fruit on plantations for harvest offset the impact of El Niño weather conditions, the Malaysian Palm Oil Board (MPOB) said on Thursday.

Production of the world’s largest palm oil producer fell by 20% during the El Niño phenomenon in 2016, but the impact this year has not been severe so far, said Ahmad Parviz Ghulam Kadir, the regulator’s director general.

The forecast refutes MPOB’s May forecast that production could fall by 1-3 million tons in 2024.

“We don’t see a very strong or serious negative impact of El Niño yet,” Ahmad Parviz told reporters on the sidelines of an industry conference in Mumbai.

El Niño is a warming of Pacific waters that typically leads to drier conditions in Asia, which reduces the yield of some crops.

“We expect higher production in 2024 than this year because of better labor availability and some of the new areas will start to produce crops,” he said.

Palm oil planters were forced to let thousands of tons of fruit rot for the third year in a row in 2022 as labor shortages prevented companies from increasing harvesting during the peak production season.

Malaysia’s crude palm oil production is expected to rise to 19 million tons in 2023 from 18.45 million tons last year, Ahmad Parviz said, Reuters reports.

However, at the end of the year, stocks will remain at the level of last year’s 2.2 million tons due to increased exports, he said. Exports are forecast to rise to 16.3 million tons in 2023 from 15.7 million tons last year.

Used in everything from cakes to shampoos and cleaning products, palm oil competes with soybean oil, sunflower oil, and rapeseed oil, which are produced mainly in Argentina, Brazil, Russia, Ukraine, and Canada.

Tags: Malaysia, palm oil