Global palm oil production is expected to rise by 6 percent, with production in both Malaysia and Indonesia rebounding as the impact of El Nino dryness wanes, the United Stated Department of Agriculture (USDA) said in its latest world supply and demand report.
Palm oil remains the dominant food oil, representing a third of total vegetable oil consumption. Industrial use for palm oil will continue to expand, particularly with stronger biofuel policies in Indonesia and Malaysia seeking an increase in domestic consumption, the report added.
Lower petroleum prices have dampened the demand for alternate fuels such as biodiesel. Global palm oil trade is forecast to continue its rebound as growing output enhances the competitiveness vis-à-vis other oils, particularly in South and East Asia, it said.
- Indonesia exports are forecast up 500,000 tons to 25.0 million, while Malaysia is up 350,000 tons to 18.0 million.
- India imports are forecast up 375,000 tons to 9.9 million, and Bangladesh is up 100,000 to 1.5 million tons.
- U.S. imports are forecast up to 110,000 tons to 1.2 million
Global palm kernel production in 2016/17 is forecast to rise reflecting the prospects for increased palm oil production. Trade is negligible as most seed is crushed locally. Palm kernel meal trade is forecast to rise, led by New Zealand imports and their growing dairy industry.
In contrast, EU imports are expected to remain flat in response to ample supplies of alternative feed ingredients. Palm kernel oil imports are forecast to drop modestly on account of slow demand in the United States.
- Indonesia meal exports are up 300,000 tons to 4.25 million, and oil exports up 50,000 tons to 1.7 million.
- Malaysia meal exports are up 50,000 tons to 2.5 million, while oil exports are unchanged at 1.1 million tons.
- EU meal and oil imports remain steady at 2.1 million and 600,000 tons, respectively.
- New Zealand meal imports are up 200,000 tons to 2.4 million.
- China oil imports are flat at 600,000, while U.S. imports are lowered to 314,000 tons
According to the report, global copra production in 2016/17 is forecast to increase slightly, mostly on improved harvests in the Philippines and Vietnam. Global trade remains small at less than 100,000 tons and is expected to decline slightly. Copra crush is forecast to rise modestly in line with the larger production leading to a modest increase in meal and oil production. Copra meal and coconut oil trade are forecast to remain relatively flat. Growing demand for coconut oil, with limited prospects for increasing trade, will continue to keep stocks lower and price premiums high.
- Philippines copra meal and coconut oil exports are up at 450,000 and 840,000 tons, respectively.
- Indonesia copra meal exports are forecast to rise to 240,000 tons while coconut oil exports remain flat at 700,000 tons.
- South Korea copra meal imports are forecast 20,000 tons higher at 420,000.
- EU coconut oil imports remain unchanged at 520,000 ton while imports by the U.S. rise 12,000 tons to 570,000.