Malaysia’s largest palm oil producer warns El Nino could hit palm oil production

Malaysia’s largest palm oil producer FGV Holdings recently said that Malaysia’s palm oil production in 2023 could be lower than expected if the El Nino weather pattern predicted by some weather agencies occurs in the second half of the year.

Malaysian palm oil production is expected to reach 19 million tons in 2023, up from 18.45 million tons in 2022, said FGV Chief Executive Officer Najul Mansoor. But if El Niño arrives as expected, production could drop slightly.

El Niño usually leads to drier weather in Southeast Asia, and rainfall in Indonesia and Malaysia will be below average, which is not good for oil palm, a crop that requires a lot of water to grow.

Climate change poses a challenge for plantation management. Mansour said there were floods earlier this year, and if there is another El Nino this year, there will be a dry period in the second half of the year. He added that the greater impact of El Nino on oil palm production will be seen in 2024.

Source: BoE Guru

Post time: Mar-16-2023