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Production
Estimates and Crop Assessment Division |
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Production
Estimates and Crop Assessment Division |
February 11, 2004
Average monthly rainfall in Malaysia in the fourth quarter of 2003 was 381 millimeters. This was excessive, and is expected to have a negative effect on Malaysian palm oil production in the third quarter of 2004. Rainfall levels above 300 millimeters per month reduce pollination levels, which in turn reduce output 6 to 9 months later. Rainfall was heaviest in the states of Pahang and Terengganu, in the central and eastern peninsula. Pahang averaged 591 millimeters per month; Terengganu averaged 519 millimeters per month in the fourth quarter. In Eastern Malaysia, Sarawak had excessive rains, averaging 448 millimeters; Sabah had modestly excessive rains, averaging 344 millimeters. Joho, in the southern part of peninsular Malaysia--the state with perhaps the highest concentration of palm oil trees--escaped the deluge, averaging only 203 millimeters.
Looking back over the last 10 quarters shows 5 above-normal and 5 below-normal periods. Above-normal is favorable unless there is enough rain to interfere with pollination or persistent cloudiness that reduces light levels. As a result, output levels should be fairly close to trend through the remainder of the Oct.-Sept. 2003/04 marketing year. The effects of the excessive rainfall in Oct.-Dec. 2003 could bring the third quarter 2004 output level below trend.
Not enough data is available yet to project output for marketing year 2004/05, but rainfall levels that have occurred in the yield-determining time periods portend trend production levels in the first three quarters of 2004/05.
Using the Malaysia rainfall data, yield for 2003/04 (Oct.-Sept.) is estimated by the Malaysia Rainfall Regression Model (MRRM) at 3.74 tons per hectare, which is slightly above average. This projection would imply a production level of 12.5 million tons (using a projected harvested area of 3.35 million hectares). The USDA estimates 2003/04 production at 13.4 million tons, higher than the output indicated by the MRRM and the long-term yield trend only. The higher estimate is based on increased fetilizer applications and the use of improved, higher yielding selections of oil palm.
Note: The MRRM linear regression model uses rainfall lagged 3 quarters, 1 year cumulative rainfall lagged 6 quarters, and time as independent variables regressed against yield. Because of the characteristics of linear regression, the model continues to increase projected yields even as rainfall becomes excessive; thus, the model tends to overstate yield when average monthly rainfall lagged 3 quarters is above 300 mm, and understate yield when rainfall is optimal. A variety of information sources are used in determining official USDA estimates for Malaysian palm oil.
