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.