Drier Weather May Affect Palm Oil Output in 2010

Indonesia and Malaysia, the world’s largest palm oil producers, may experience slower output growth next year due to the resurgent El Nino weather condition, a top industry analyst said on Wednesday. Drier weather from El Nino may hit yields, leading to tight palm oil supplies just as U.S. and South American soyoil from a record soy harvest enter markets from May, said Dorab Mistry, head of vegetable oils trading with Godrej International. “El Nino is still very much a factor. We should watch out for the likely change in the weather from mid-December onwards,” Mistry told Reuters on the sidelines of an industry conference in Indonesian resort island of Bali. “All the indications show we will have a fairly moderate El Nino starting in December to at least the end of February.” London-based Mistry did not give forecasts for Malaysian and Indonesian production of the vegetable oil in 2010.

Malaysian palm oil stocks will reach its highest this year at 2.1 million tonnes in December but will fall for next year due to slower output growth and strong shipments to China and India for the first two quarters, Mistry said. Analysts often refer to Malaysian palm oil stocks as data is more readily available compared to Indonesia. — REUTERS Source : Business Times


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