Heavy rains anticipated to hit Malaysia’s palm oil manufacturing once more in December, MPOB says By Reuters

By Ashley Tang and Rajendra Jadhav

KUALA LUMPUR/MUMBAI (Reuters) – Malaysian palm oil manufacturing is predicted to fall for the fourth consecutive month in December as heavy rains affected the harvest of the world’s second largest tropical oil producer, the physique informed Reuters on Friday regulation of the sector.

A drop in manufacturing in Malaysia would scale back the nation’s inventories and additional enhance benchmark futures, that are already close to their highest ranges in about two and a half years.

“We estimate a possible discount of round 5-8% in crude palm oil (CPO) manufacturing beneath regular circumstances,” mentioned Ahmad Parveez Ghulam Kadir, chief govt officer of the Malaysian Palm Oil Board (MPOB).

“Nevertheless, if extreme flooding persists, the discount may attain 10 to twenty %,” he mentioned.

Peninsular Malaysia, notably its northeast coast, and southern Thailand had been hit by torrential rains which precipitated flooding that killed dozens of individuals and broken houses, transport hyperlinks and hundreds of individuals. acres of rice crops.

Malaysian Prime Minister Anwar Ibrahim mentioned the rains had been far past expectations, with some areas on the east coast receiving greater than six months of rainfall between November 26 and 30.

Malaysia’s CPO manufacturing in November fell 9.8% from the earlier month to 1.62 million metric tonnes, the bottom month since 2020, the board mentioned earlier this week.

The Malaysian Meteorological Division (MET) mentioned on Friday that just a few states could obtain steady rains from December 16 to 19.

The MPOB is carefully monitoring the state of affairs because the MET has predicted a second wave of flooding on account of heavy rains, Kadir mentioned.

Heavy rains may additional harm plantation infrastructure, corresponding to roads and bridges, making it tough to reap and transport contemporary fruit bunches from plantations to mills, he mentioned.

In December 2023, Malaysia harvested 1.55 million tonnes of CPO, however this December’s manufacturing may very well be a lot decrease than final yr, mentioned a Malaysian palm oil producer, who wished to stay nameless.

Palm oil sometimes trades at a cheaper price than soybean oil and sunflower oil, however is presently larger than these competing oils on account of restricted provide.