Indonesia's January palm oil output falls for fifth month

Indonesia's January crude palm oil (CPO) output fell for a fifth month, a Reuters survey showed, as the El Nino dry weather pattern hindered production in the world's top grower. Indonesia's CPO January production was 2.440 million tonnes, according to the median estimate in a survey of three industry officials and one plantation company. That is down slightly from 2.457 million tonnes output in December and the lowest since March 2015.
"El nino started around June last year and peaked around August to September. It would impact production five to six month later, which is showing in these recent months," said Agustinus Reza Kirana, plantation analyst with Bahana Securities in Jakarta. Malaysia, the world's second-biggest palm producer after Indonesia, reported earlier this month that CPO output in January fell 14 percent from the previous month.
Southeast Asia's peak palm oil output usually runs over August to September, with production in Indonesia and Malaysia typically easing as the region heads into its wet season from November until around March. Indonesia's CPO exports were 2.005 million tonnes in January, down 25 percent from 2.675 million tonnes in December, the survey showed.
Slowing demand from China combined with high palm stocks in India, the world's two major buyers, are impacting exports from Indonesia, Kirana added. According to the survey, Indonesian palm stocks were at 2.025 million tonnes in January, the lowest since the survey started in August 2014. Stockpiles fell from 2.425 million tonnes in December.
Indonesia's domestic consumption of the tropical oil was estimated in a range between 550,000 tonnes and 752,000 tonnes, according to the survey responses. Falling output and inventories may support benchmark palm prices, which climbed nearly 10 percent in 2015 and are currently trading around 2,590 ringgit ($623.65) a tonne. The Indonesian Palm Oil Association (GAPKI) showed December CPO exports at 2.51 million tonnes. GAPKI data for January has not been released yet. Indonesia does not release official government data on palm oil production. The Reuters survey for January comprises contributions from GAPKI, the Indonesian Palm Oil Board, the Indonesian Vegetable Oil Industry Association and PT Sinar Mas Agro Resources & Technology Tbk, one of the largest listed palm oil companies.