Malaysian palm oil output set to rise

Malaysian palm oil production is expected to touch 14.2 million tonne in 2005, registering a healthy growth from the previous year's 13.98 million tonne, according to information from the Malaysian Palm Oil Promotion Council (MPOPC).

While this could imply that the already bearish palm oil market will remain depressed, India's crude palm oil imports are not expected to see a significant rise in the January to March period owing to seasonal factors.

Furthermore, higher production across the world could mean that aplm oil production overtaking soya oil productionin the next 10 years, Yusof Basiron, director general Malaysian Palm Oil Board, said here.

He attributed the higher output to rising area under crop, better yields and more advanced cultivation practices.

Comparing the current growth rate of production of palm oil and soya oil, he said, "Palm oil production is growing at 7.9 per cent per year while soya oil is only seeing a 5.6 per cent growth," he said.

Basiron said 250,000 hectare of land is required to produce one million tonne of palm oil, while soya oil requires two million hectares for 1 million tonne.

This was slowing growth in soya oil production.

"The world palm oil production is projected to rise to approximately 37.07 million tonne (mnt) by 2015, and further to 43.2mnt by 2020 from the current 29.13mnt," said Basiron.

Soya oil production will grow to 37.07mnt and 41mnt from 31.45mnt at present.

Malaysian exporters will be looking at new markets like China, west Asia and Vietnam, said Basiron.

Existing markets like Turkey, Egypt and Syria are highly price sensitive and buy only when prices fall, he added.