KUALA LUMPUR: Global palm oil production is expected to decline by 2 million metric tons next year and could fall even more due to the El Niño weather pattern, which brings hotter and drier weather, a leading industry analyst said on Wednesday.
El Niño, which typically brings drier conditions to top palm oil producers Indonesia and Malaysia, has yet to weigh on palm yields due to the lagged effect of weather on crop output.
However, the weather phenomenon and other climate anomalies were expected to have a strong impact on palm oil output in 2027 and 2028, said Thomas Mielke, executive director of Hamburg-based forecaster Oil World.
“Our current estimate of the decline… is a conservative estimate,” he told an industry forum in Kuala Lumpur. Palm oil output in Malaysia, the world’s second-biggest producer, was estimated to decline to between 19.2 million and 19.3 million tons next year, Mielke said.
Meanwhile, a projected slowdown in palm oil exports next year from leading producer Indonesia could be challenging for importing countries, which may face difficulties in offsetting the shortfall, he added.
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