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Palm oil prices seen at RM2,300-2,400 in Q1, El Nino impact limited: Felda CEO
[KUALA LUMPUR] Palm oil prices are expected to trade at 2,300-2,400 ringgit per tonne in the first quarter of 2016, as recent rain patterns suggest the impact of an El Nino weather event on yields could be limited, the chief executive of plantation firm Felda Global Ventures said.
In October, Mohd Emir Mavani Abdullah had said the El Nino weather pattern was likely to cut palm oil output in Indonesia and Malaysia by 5-6 per cent in 2016 and lift prices to 2,500 ringgit per tonne in the first quarter.
"Looking at the current rain patterns, it could be that the El Nino will come in a very subtle way, that could be a sign of increase in production in the last quarter of this year, and that will increase the stock and affect the price," Abdullah told Reuters in an interview on Wednesday.
However, Felda's palm oil output in 2016 could drop by 1-3 per cent year-on-year if the El Nino does hurt yields, he added. Felda is the world's third largest palm plantation operator.