Palm oil output to fall after 9 years of growth

Palm oil output to fall after 9 years of growth - New Straits Times
By Ooi Tee Ching
bt@nstp.com.my September 10 2007


FOR the first time in nine years, Malaysia's crude palm oil (CPO) output will decline and the minister in charge sees a shortfall of 1.5 million tonnes from an earlier forecast of 16.5 million tonnes. However, the situation is not alarming as it is part of a normal cycle for the industry.

"Besides the flood factor at the beginning of the year, I've also been informed that this year coincides with the down cycle in palm oil output.

"Every few years, trees become stressed and they produce fewer fruit bunches.

"From January to July, we harvested 8.04 million tonnes of CPO, seven per cent less than in the same period in 2006," Plantation Industries and Commodities Minister Datuk Peter Chin told Business Times.

The Finance Ministry, in its 2007/08 economic report last Thursday, revised its CPO production forecast to 15.7 million tonnes.

Chin said the latest data from the Malaysian Palm Oil Board provide a more sobering account that the oil palm trees are a little stressed this year.

"Not to worry, we should see a rebound next year as they recover. Oil palm trees need to take a rest every now and again," he said.

"Another (piece of) good news is that in the first half of the year, we saw more replanting (to replace) unproductive trees than previously.

"This will ensure better supply of palm oil four years from now," he added.