Commodity Online
JAKARTA : World’s top two palm oil producing countries of Indonesia and Malaysia now facing a new crisis as a strengthening El Nino influence in the Indonesian Basin has reduced rainfall in the these countries.

Heavy rainfall was considered favorable for palm fruit development and high yields in palm oil, during La Nina’s reign last year.

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The tide seems to be turning, as drier conditions have taken hold in the western Indonesian Basin these past 30 days. The outgoing heat-radiation analysis is a proxy for rainfall showing hotter and drier conditions in the top producing areas for palm fruit, in Sumatra, Borneo and the Malaysian peninsula.

Indonesia has been increasing the area of palm fruit plantations in Borneo and Sumatra. Trees planted 8-10 years ago are coming of age, partially explaining the surge in palm oil production last year to 20.98 million metric tons.

Favorable growing conditions with plentiful rainfall also have contributed to high yields and record palm oil output.

India and China are the largest importers of Asian palm oil buying up 15.2 million metric tons of the 32.7 million metric tons of palm oil shipments from Indonesia and Malaysia in 2008-09.

courtesy: stormx.com

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