Palm oil output in Malaysia will probably drop the most in 10 months in December amid a seasonal decline in yields. Production is set to fall 11 per cent to 1.56 million tonnes from 1.75 million tonnes in November, according to the median of five analyst and trader estimates compiled by Bloomberg. That would be the lowest for December since 2011 and 6.6 per cent less than a year earlier, Malaysian Palm Oil Board data show. Futures in Kuala Lumpur are heading for the third annual loss in four years as global cooking oil supplies expand and a plunge in crude to the lowest since 2009 reduces demand for alternative fuels. Indonesia and Malaysia have scrapped export taxes to help cut reserves. Output typically declines from November through February because of the low-production season and as rains disrupt harvesting. “It’s highly dependent on the weather,” Ivy Ng, an analyst at CIMB Investment Bank Bhd in Kuala Lumpur, said by phone. “We have a bit of flooding here and there, but we don’t know how long it will last, and which areas are affected, and whether it has affected harvesting. More clarity will be seen at the end of the month.” Futures rose 0.7 per cent to RM2,225 ringgit a metric tonne on Bursa Malaysia Derivatives yesterday. Prices have declined 16 per cent this year.
Posted on: Fri, 26 Dec 2014 09:04:40 +0000
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