Bloomberg News

Palm Oil Output Seen Reaching Record as Crop Area Expands

June 12, 2012

Global palm oil production may rise to a record in the next season as Indonesia and Malaysia, the world’s biggest producers, expand crop area, Oil World said.

World output may total 54.9 million metric tons in 2012-13, up 6.6 percent from a year earlier, the Hamburg-based oilseed researcher said in an e-mailed report. High prices in recent years have encouraged expansion. Production is also expected to increase in countries including Thailand, Colombia and Nigeria, the remaining top five global producers, Oil World said.

Mature palm-oil producing area will increase to 14.8 million hectares (36.6 million acres) worldwide by mid-2013, up 600,000 hectares from a year earlier, Oil World said. Expanding crop areas may be limited because of increasing environmental concerns and pressure from consumer groups to protect forests and wildlife, Oil World said.

Palm oil production also may be jeopardized if El Nino weather conditions develop from September onwards, Oil World said. El Nino, caused by periodic warming of waters in the Pacific Ocean, tends to bring below-normal precipitation to Southeast Asia and may also affect areas of Malaysia, Indonesia and the Philippines, according to the report.

To contact the reporter on this story: Whitney McFerron in London at wmcferron1@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net


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