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Palm oil production to revive following departure of El Niño

By RJ Whitehead

- Last updated on GMT

Palm oil production to revive following departure of El Niño

Related tags: Palm oil, Southeast asia, Malaysia, Indonesia

Global palm oil production is expected to grow by 6m tonnes this year, after output was hit hard in 2016 due to the strong effects of the lingering El Niño weather system from the previous year.

According to Research and Markets, Southeast Asian palm oil yields fell in 2016 to 3.26 tonnes per hectare, compared to 3.62 tonnes per hectare in 2015. 

Because of the weight of Indonesia and Malaysian production—together they account for 85% of the world’s output—this drop caused global availability to fall for the first time in almost 20 years, the data agency found. 

Global palm oil consumption has grown consistently at approximately 7% per year for the last two decades, with demand getting a substantial boost from rising consumption in India and China.   

It is expected that Indonesia will produce 36.5m tonnes of palm oil this year, an increase of 3%.

Related topics: Commodities

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