Malaysian and Indonesian palm oilproduction is likely to drop sharply this year, due to lower
yields, the Hamburg-based newsletter Oil World said.
    The publication expects total Malaysian output during
Jan/Sept 1987 to decline by eight pct to 3.05 mln tonnes. For
East Malaysia, it put production during the period at 297,000
tonnes after 312,000 a year earlier and for West Malaysia 2.75
mln compared with just over 3.0 mln during Jan/Sept 1986.
    It said new plantings had slowed markedly in both
countries, but the effects of this will not be felt until
1988-90.
    Above normal yields during recent years resulted in trees
reacting to the stress by changing the sex ratio to more male
inflorescences and/or aborting more female, Oil World said.
    Yields per hectare are also likely to be adversely affected
this year by insufficient rain up to 25 months ago. This could
especially affect trees in West Malaysia during April/June,
while in East Malaysia the impact will be in February/April and
July/Dec, and in Indonesia July/Sept.
    Last year's cut in fertilizer use will hit this year's
yields and bigger effects are expected within the next three
years, Oil World said without elaborating.
    Opening stocks in West Malaysia at the start of this year
were put at only 565,000 tonnes compared with 914,000 in
January 1986, Oil World said.
    West Malaysian net exports are therefore expected to drop
500,000 tonnes to 2.54 mln during Jan/Sept, while those of East
Malaysia are likely to decline by 10 pct to 280,000 tonnes.
    Indonesian palm oil production is forecast to fall about
eight pct during Jan/May, but to rise from June on. Overall
Indonesian output during Jan/Sept is forecast to rise three pct
to 933,000 tonnes. Indonesian stocks as of April 1, however,
are put at only 65,000 tonnes compared with 160,000 a year ago.
    Indonesian export commitments and domestic requirements are
both running at high levels, Oil World said, and it expects the
country's imports to reach a record 110,000 tonnes during
Jan/Sept. The bulk of this will arrive during Feb/May, ahead of
the April elections and the religious Ramadan festival
throughout May, it said.
    Indonesian net exports, therefore, may fall by 29 pct to
350,000 tonnes, Oil World said. The possibility that recent
Indonesian palm oil purchases will not actually enter the
country but be transshipped to other countries to fulfill
Indonesia's export orders cannot be ruled out, it said.
 REUTER
