Malaysia's palm oil production could reach 20 million tonnes in 2027 — TimesLIVE

Malaysia's palm oil production in 2027 is estimated by analysts at around 19.8–20 million tonnes. Regular rainfall helped the world's second-largest producer of the commodity avoid the worst-case scenario of losses caused by El Niño, TimesLIVE reports.

This figure will be approximately 15% higher than the 2016 volume, when a strong El Niño reduced yields, but slightly below the expected near-record production of 20.28 million tonnes in 2026.

Rainfall limited crop losses

Julian McGill, managing director of consulting firm Glenauk Economics, said that production in Malaysia will decline next year, but not as significantly as some market participants had forecast. According to him, the country had far fewer months with rainfall below 100 mm than during the strong El Niño of 2015–2016.

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Mohd Haris Mohd Arshad, chief executive of one of the world's largest palm oil producers, SD Guthrie, told Reuters that it rained almost every day in Malaysia's growing regions.

A deeper decline is expected in Indonesia

Meanwhile, in parts of central and southern Kalimantan in Indonesia, drought is approaching the levels of 2015–2016. McGill forecasts that Indonesian production in 2027 will decline by about 2 million tonnes compared with 2026, while the decline in Malaysia will be less than 0.5 million tonnes.

Indonesia's palm oil producers association, GAPKI, estimates the country's production at 53.7 million tonnes in 2026 and forecasts a decline to 51.7 million tonnes in 2027. Malaysia's meteorological service expects El Niño to peak between March and May 2027, while the maximum temperature could exceed the local record of 40.1°C set in 1998.