El Niño effect continues to linger

Palm oil output in the world’s second largest producer of oil, Malaysia, fell 6% between October and November to 1.57Mt. Production of the tropical oil declines seasonally around December time, partly due to monsoon rains restricting harvesting. However, November 2016 output was the lowest for the month since 2010 as the country continued to feel the effects of the now finished El Niño.

Palm oil accounts for around 40% of all vegetable oils produced globally (USDA). Reduced palm oil output in Malaysia and top producer Indonesia, have thus contributed to the tight global vegetable oil supplies in 2016. This, coupled with increasing vegetable oil demand, has been a supportive influence on rapeseed markets.

This article was contributed by Isobel Robinson / Analyst – Cereals & Oilseeds, Market Intelligence, Agriculture & Horticulture Development Board

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