El Niño could cut palm oil production in 2027
In Ukraine, UkrAgroConsult reported that palm oil production in Indonesia and Malaysia could decline by around 3% in 2027 due to prolonged dry weather caused by a strong El Niño.
Analysts expect the impact on plantation yields to emerge with a lag, increasing risks to global supply, according to the report.
Indonesia’s output could fall to 49 million tons, while Malaysia is expected to produce around 19.5 million tons. Aging plantations and Indonesia’s expanding biodiesel mandate are adding further pressure to the supply-demand balance by increasing domestic palm oil consumption, the report added.
However, the impact of El Niño on production may be less severe than previously expected. The Indonesian Palm Oil Association now forecasts a 3% decline in 2027 output, compared with an earlier estimate of 5%.
Category: Food & Agriculture
