20/7/2017 (Khmer Times) - KUALA LUMPUR (Reuters) – Malaysia’s palm oil output is on track to rebound this year after an El Nino-affected 2016, but will miss earlier forecasts that it could match 2015’s record high, according to traders, planters and analysts.

Leading analysts and industry figures in March forecast 2017 output in the world’s second largest producer after Indonesia at 19.9 million to 20 million tonnes, in line with 2015’s 19.96 million tonnes.

However, eight respondents surveyed by Reuters forecast output this year at between 18.7 million tonnes and 19.5 million tonnes, up around 10 percent from 17.3 million tonnes in 2016 but below the record high.

“Production is not so robust, there will be increases but not a full blown recovery. Indonesian output looks to be stronger as they have younger estates,” said Ivy Ng, regional head of plantations research at CIMB Investment Bank.

Expected labour shortages at Malaysian plantations, especially during the output peak in the fourth quarter, would also impact output, Ms Ng said.

Lower than anticipated Malaysian production could support benchmark palm oil prices, which have shed nearly 20 percent this year. Palm oil was little changed at 2,508 ringgit ($585.57) at the midday break yesterday.

Palm oil production typically peaks in August or September, but could be pushed back to October this year as the lingering impact of last year’s El Nino dry spell pushes back seasonal weather patterns.

“Peak production should be in October at around two million tonnes,” Ms Ng said.

Weaker than expected production numbers would also cap stockpiles in Malaysia, unless demand weakens significantly.

“End-stocks at the peak will not exceed two million tonnes,” said a manager with a Malaysian plantations company, who expects stockpiles to peak in November or December.

“I expect stocks to continue to be tight for the rest of the year,” he added.