Southeast Asian palm oil output likely to stay lower

Southeast Asian palm oil output will not be as high as expected this year as the effects of the El Nino weather condition in 2010 may weaken yields, a top official from Malaysia's IJM Plantations said on Wednesday. Chief Executive Joseph Tek said the impact of the El Nino-driven drier weather can be noticed now with the development of more male flowers at the expense of oil-yielding female flowers, a scenario which can extend until next year.
Palm oil production in top exporters Indonesia and Malaysia have recovered strongly after two years of erratic weather hurting yields, leading many in the industry to expect further output growth and swelling stocks. "For the second half of this year, this anticipated high crop may not happen," Tek told Reuters in an phone interview from the firm's headquarters in Malaysia's oil palm growing Sabah state in Borneo island. "I don't think 7-8 percent growth in production in Malaysia and Indonesia is really that significant and I think demand can take it."
Tek, who oversees 30,000 hectares of oil palm estates in Malaysia, pegged the Southeast Asian country's production at 18.2 million to 18.4 million tonnes this year from 17.0 million tonnes in 2010. In Indonesia - where IJM has started planting on its 40,000 hectare land bank - overall production could rise to 23.9 million to 24.0 million tonnes this year from 22.3 million tonnes, Tek said.