Malaysia palm oil output resilient despite flood disruption, says MPOB

Malaysian Palm Oil Board said Monday that the country's palm-oil production was resilient, despite recent floods in several states.

Ahmad Parveez Ghulam Kadir, MPOB's director general, said that while localised disruptions could occur as a result of temporary waterlogging or harvesting delays the overall impact is expected to be manageable.

Malaysian Meteorological Department stated last month that it expected the Northeast Monsoon to last until March. The Northeast Monsoon began on November 5, last year. It warned that heavy rains over a short period of time could lead to flooding in flood-prone and low-lying areas.

In November of last year, Malaysia suffered its worst flooding in decades, forcing more than 90,000. In January, another wave of flooding forced thousands of people to leave their homes. This time in Johor in southern Malaysia as well as Sarawak and Sabah in Borneo.

Sarawak and Sabah accounted for 55% of Malaysia’s 5,61 million hectares palm oil plantations and 43.6 percent crude palm oil production in 2013.

Ahmad Parveez, MPOB's Director-General, said that the MPOB will work closely with the growers to assist the industry in its recovery.

He said that while some short-term impacts are possible, Malaysia’s palm oil industry is well prepared to protect its production and ensure a steady global supply.

Ahmad Parveez, when asked about the future demand for palm oil from key, said that demand from India and China is stable.

He said that in India, refiners are switching to soybean oil because it has better margins for refining. However, demand is expected before the Muslim month of Ramadan. I

He added that future imports in China will be determined by the price competitiveness of products and market conditions.

"The demand in Europe is relatively stable. However, the EU Deforestation Regulation has been delayed, so there's no urgency to stockpile. Imports can fluctuate depending on how the industry adjusts to regulatory changes and price fluctuations.

He said that "Palm Oil's competitiveness will be key in determining short-term trends on these markets." (Reporting and editing by Kate Mayberry; Ashley Tang)

(source: Reuters)