Malaysia’s Dec palm oil output down 15.4%

MALAYSIA'S crude palm oil output fell 15.4 per cent to 1,396,134 tonnes in December, above the market forecast, from a revised 1,650,004 tonnes a month earlier, official crop agency Malaysian Palm Oil Board said today.The drop in production is less than the 18.2 per cent decline estimated in a Reuters poll.Malaysian crude palm futures surged to a new record by the mid-day close today, ahead of the crop agency’s release of production figures as investors heavily bet that last month’s floods curbed output while snubbing dismal export numbers from a cargo surveyor.The benchmark March contract on the Bursa Malaysia Derivatives Exchange rose as high as RM77, or 2.4 per cent, to RM3,278 ringgit (US$982) per tonne, surpassing a high of RM3,204 reached on Wednesday.“Exports may be softening but the underlying point is that there might not be enough palm oil to even serve that level of demand and the market jumped on that idea,” said an analyst with a local commodity trading firm. “This condition might go on for another month or so.” Exports of Malaysian palm oil products for January 1-10 fell 30.9 per cent to 310,737 tonnes from the 449,543 tonnes shipped between December 1 and 10, cargo surveyor Intertek Testing Services said today.Meanwhile, cargo surveyor Societe Generale de Surveillance said exports of Malaysian palm oil products for January 1-10 fell 17.6 per cent to 356,194 tonnes from 432,315 tonnes shipped between December 1 and 10.Palm oil prices are up more than 7 per cent since the start of the year, fuelled by booming demand across Asia, talk of a cut in Indian import duty cut, and surging global crude and vegetable oil markets.The market expected palm oil output to fall 18.2 per cent to 1.35 million tonnes in December from a month ago due to the monsoon floods, which had inundated key producing areas in central and south Malaysia. Monsoon floods in central Pahang state and southern state of Johor drove more than 34,000 people from their homes and cut off roads in December, local media have reported.Millers in these key palm growing regions have been rejecting fruit bunches that have turned rotten due to over-exposure to wet weather, plantation officials say. - Reuters