Malaysia’s palm oil production in 2020/21 marketing year estimated to be lowest since 2015 – USDA

Malaysia’s estimated palm oil production in the 2020/21 marketing year (MY) of 18.5 million metric tons is down 3 percent from last month and down 4 percent from the previous year, the U.S Department of Agriculture (USDA) said in its latest monthly report on global agriculture.

Harvested area is estimated at 5.4 million hectares, unchanged from last month, but up 1 percent from the previous year. Yield is estimated at 3.43 tons per hectare, down 3 percent from last month and 5 percent from the previous year. The current yield estimate would mark the lowest since MY 1997/98, the USDA said.

Since January, observed rainfall has been well above average in Peninsular and Eastern Malaysia. In the months of March and April, Peninsular Malaysia experienced record setting rainfall, most notably in the Pahang state, one of the top four palm oil producing states in Malaysia.

These extreme rainfall occurrences have resulted in ongoing localized harvest disruptions in the main oil palm regions and have led to significant monthly crude palm oil (CPO) output lows, the report said, adding that according to the Malaysia Palm Oil Board, the latest Malaysia CPO data released for the month of April was estimated 8 percent down from last year and 1 percent below the 5-year average.

The state of Pahang CPO output for the month of April was reported at 12 percent below last year. Local reports indicate persistent rainfall stemming from La Niña has negatively impacted the CPO monthly output and yields as workers ability to harvest oil palm has been limited, the report said.

Additionally, there have been ongoing labour shortages due in part to the COVID-19 pandemic as the Malaysian government closed borders and froze the hiring of foreign workers. Foreign workers make up more than 75 percent of Malaysia’s palm oil workforce.

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