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By Emily Chow
NUSA DUA, Indonesia, Nov 3 (Reuters) - Indonesia’s palm oil production will rise to 38.3 million tonnes in 2018, up from 36.3 million tonnes this year, as growers in the world’s biggest palm producer slowly overcome the effects of a 2015 drought, said leading industry analyst Thomas Mielke on Friday.
Longer term, Mielke, the editor of the Hamburg, Germany-based newsletter Oil World, predicts that Indonesia’s output will climb to 48 million tonnes by 2025. Malaysia, the world’s second-biggest palm oil producer, will have output at 23.1 million tonnes by then, he told an industry conference in Bali, Indonesia.
Crude palm oil prices are likely to fall in the next four to eight weeks but will not drop below 2,650 ringgit ($626) per tonne, he predicted.
For 2018, he sees prices rising in the early part of the year and then falling in line with seasonal gains in output.
“In January to March 2018, world vegetable oil output will be seasonally low and stocks will decline, resulting in a price appreciation,” he said. “But, assuming normal weather, a production surplus of palm oil is likely in April to September 2018, leading to some limited price pressure.”
Palm oil production is set to improve next year as crops shake off the lingering effects of a dry El Nino weather pattern in 2015. The El Nino brought scorching heat across Southeast Asia, hitting palm’s fresh fruit yields and lowering output.
He last forecast Malaysian palm oil futures to fall to 2,600 ringgit a tonne in the fourth quarter of this year on increasing output.
Benchmark palm oil futures on the Bursa Malaysia fell for a second day on Friday to 2,801 ringgit per tonne, down 0.7 percent, tracking an overall decline in the edible oils markets.
Prices rose to their highest in about six weeks on Monday.
Indonesia and Malaysia together produce nearly 90 percent of the world’s palm oil.
$1 = 4.2340 ringgit Reporting by Emily Chow; Editing by Christian Schmollinger