Kalimanatan Palm Oil Output Predicted to Plummet Amid Widespread Fires
Indonesia's palm oil output in the major production region of Kalimantan is expected to fall by 12% to 15% in the fourth quarter due to prolonged dry weather and widespread fires. The country, which is the world's largest palm oil producer and exporter, has been battling its worst wildfires in 11 years.
The El Niño-linked drought conditions have parched forests and peatland, particularly in Central and West Kalimantan provinces, where over 36% of Indonesia's total national output is produced. Cheang Kang Wei, an agricultural commodities analyst at StoneX brokerage, estimates that palm oil output could fall by 12% to 15% in October to December.
The damage done by the fires could weigh on palm oil production for some time, according to Eddy Martono, chairman of the Indonesian Palm Oil Association. Fire-damaged oil palms could die or suffer stress and take about three years to recover.