Global palm oil production is expected to hit 74.9 million tonnes for 2018-2019, as prices of the commodity likely improve this year, leading palm industry analyst Thomas Mielke said on Monday.
The forecast is a significant hike from the 70.5 mt onnes of palm oil produced in the 2017/18 period, according to data from the US Department of Agriculture.
Mielke said palm oil was undervalued at the end of February, and he expected prices to rise.
“In the course of the next 6, 10 months for the rest of the year, we should see on average a recovery in prices,” said Mielke, editor of the Hamburg, Germany-based newsletter Oil World, while speaking at an outlook seminar in Kuala Lumpur.
Production in Indonesia, the world’s largest palm oil producer, was seen at 43 mt in 2019 while Malaysia’s output was expected to hit 20.1 mt, he said.
Biodiesel production was expected to rise in 2019 from the previous year to 7.5 mt illion tonnes in Indonesia and 1.4 mt in Malaysia due to higher mandates in both countries.
Mielke estimated that, worldwide, 18.3 mt of palm oil will be used for biodiesel production in 2019.