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Malaysia's palm oil production has remained resilient despite the risk of disruption from floods that hit several states in recent months, the Malaysian Palm Oil Board (MPOB) said on Monday.
MPOB director-general Ahmad Parveez Ghulam Kadir told Reuters: "While some localised disruptions may occur due to temporary water accumulation and delayed harvesting, the overall impact on the country's production is expected to be manageable."
The Malaysian Meteorological Department said last month that the northeast monsoon season, which began on 5 November last year, was expected to continue until March. It warned that several consecutive days of heavy rainfall could trigger flooding in low-lying and flood-prone areas.
Malaysia experienced its worst floods in decades in November last year, displacing more than 90,000 people. Another wave of flooding in January uprooted thousands more from their homes in the southern state of Johor, as well as in Sarawak and Sabah on the island of Borneo.
Sarawak and Sabah account for around 55% of Malaysia's total palm oil planted area of 5.61 million hectares, and contributed 43.6% of the country's crude palm oil output last year.
Ahmad Parveez said MPOB would work closely with growers to help the industry recover.
"While some short-term impacts may be possible, Malaysia's palm oil sector is well prepared to safeguard its production and ensure the stability of global supplies," he added.
The project is led by scientists from the AKTI research and outreach centre, a local environmental non-governmental organisation, which aims to teach children that waste materials can be reused.
Asked about future demand for palm oil from key markets, Ahmad Parveez said demand from India, China and Europe remained stable.
He added that in India, refiners had shifted towards soybean oil due to better refining margins, but demand was expected to rise as the holy month of Ramadan approaches.
In China, future imports would depend on price competitiveness and overall market conditions, he said.
In Europe, he said demand remained relatively stable, but the delayed implementation of the EU Deforestation Regulation (EUDR) meant there was no longer urgency to stockpile the oil. Imports could fluctuate depending on price movements and how the industry adapts to regulatory changes.
"The competitiveness of palm oil relative to soybean oil and sunflower oil will be the key factor influencing short-term demand trends in these markets," he added.
Source: Reuters