KUALA LUMPUR: The oil palm industry needs to wait until 2018 to see yields normalising after being badly impacted by prolonged drought due to the El Nino phenomenon.
Leading industry analyst Thomas Mielke said this year, the oil palm yield in Malaysia is set to drop 10 per cent to 17.8 million tonnes and four per cent in Indonesia to 32.2 million tonnes.
“Oil palm yields are expected to recover in Malaysia and Indonesia next year, but not much. Most probably, we will see yields normalising in 2018,” he said at the Malaysian Palm Oil Trade Fair and Seminar yesterday.
Mielke also ISTA Mielke GmbH’s Executive Director. Saying that palm oil is undervalued, he forecast that prices are likely to resume a rally soon and temporarily reach RM2,900 and RM3,000 per tonne. He attributed the rise in prices to low palm stocks and export supplies and a slower than expected recovery in production.
Yesterday, the spot month CPO price was up RM20 to close at RM2,670 a tonne, while the benchmark December 2016 rose RM42 to RM2,653 a tonne. — Bernama