THE hot and dry spell experienced in the last few months had people wondering whether they were under the spell of the El Nino weather phenomenon. Yet it appears that it was a false alarm, as the Malaysian meteorological department dismissed any such speculation, and the situation has since returned to some sort of normalcy over the past two months. However, this respite may be short-lived, as experts are predicting that El Nino will hit us in the near future. The palm oil industry is bracing itself for this imminent weather anomaly, where rainfall will be affected by the warming of the ocean. It’s a crucial time of the year for palm considering its dominance in the global oils and fats trade, and its emergence as the fastest growing edible oil worldwide, with an average growth of 7.3 per cent per annum against the world’s other big player, soybean oil, which grew just 3.3 per cent per annum in the last decade. And so much is dependent on the two biggest suppliers, Indonesia and Malaysia, who account for 51 per cent and 34 per cent of world palm oil production respectively. That translates to about 58 million tonnes of crude palm oil, where even a 10 per cent drop in yield in El Nino-inflicted cases can be catastrophic to supply worldwide, says Ling Ah Hong, director of Malaysian plantation consultancy and investment company Ganling. “Weather is a key determinant in the supply equation of palm oil, and there has been below average rainfall in Indonesia, Malaysia and even Thailand (the world’s third largest palm oil producer) in recent years and months. “If you look at Indonesia, it has suffered from bad weather over the past three years,” says Ling, who has over 30 years of experience in the plantation industry.
Posted on: Thu, 26 Jun 2014 08:45:16 +0000
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