KUALA LUMPUR: Global palm oil production is expected to hit 74.9 million tonnes for 2018-2019, as prices of the commodity likely improve this year, leading palm industry analyst Thomas Mielke said on Monday.
The forecast is a significant hike from the 70.5 million tonnes of palm oil produced in the 2017/18 period, according to data from the U.S. Department of Agriculture.
Mielke said palm oil was undervalued at the end of February, and he expected prices to rise.
"In the course of the next 6, 10 months for the rest of the year, we should see on average a recovery in prices," said Mielke, editor of the Hamburg, Germany-based newsletter Oil World, while speaking at an outlook seminar in Kuala Lumpur.
Production in Indonesia, the world's largest palm oil producer, was seen at 43 million tonnes in 2019 while Malaysia's output was expected to hit 20.1 million tonnes, he said.
Biodiesel production was expected to rise in 2019 from the previous year - to 7.5 million tonnes in Indonesia and 1.4 million tonnes in Malaysia - due to higher mandates in both countries.
Mielke estimated that, worldwide, 18.3 million tones of palm oil will be used for biodiesel production in 2019.
China was expected to raise its total palm oil imports to 5.8 million tonnes for 2018/19, as it broadens sources of oils and fats to manage the impact of its ongoing trade war with the United States, he said.
Mielke said he expected China to sharply reduce soybean crushings and imports.
"This is a big game changer for the global market," he said, though he added that soybean will eventually rebound from these lower levels.
Meanwhile, India is expected to increase its edible oils imports to 15.76 million tonnes for the 2018/19 marketing year ended October, according to forecasts by a leading Indian edible oil importer.
This compares with 15 million tonnes a year earlier, Sudhakar Desai, chief executive officer of Emami Agrotech told the seminar on Monday.
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