World palm oil output may rise

World palm oil output may rise

HAMBURG (Reuter): Global palm oil production in 1998 may reach 17.9 million tons, 500,000 tons more than estimated for 1997, the independent newsletter Oil World said.

This year would see the peak of the current four-year production cycle, which would be followed by slower growth in the mature area and lower yields, it said.

In April, it had put global palm oil output, made from the pulp of the oil palm nut, in 1998 at 18.2 million tons.

Average world yields were forecast to decline by three percent in 1998 to an average 3.2 tonnes per hectare.

Oil World said this was due to crop-specific reasons and impact from the El Nino weather phenomenon, which would bring drought to Indonesia and Malaysia, the key producers.

World supply would critically depend on Indonesia, which would be hard hit by El Nino, but was forecast to increase its palm oil area to 1.61 million hectares from an estimated 1.44 million in 1997.

Indonesia may produce 5.70 million tonnes of palm oil in 1998 after 5.15 million this year, assuming a small yield fall.

Oil World also said production of palmkernels, from which palmkernel oil and meal are derived, was forecast to rise 2.7 percent to 5.15 million tons.