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Production
Estimates and Crop Assessment Division |
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Production
Estimates and Crop Assessment Division |
August 28, 2002
Malaysian monthly average rainfall was 161 millimeters, 39 millimeters below normal in the second quarter of 2002, and so has now been below normal for 4 out of the last 5 quarters. The less than normal rainfall is likely to negatively impact palm oil yields for the 2002/03 marketing year.
Using the Malaysia rainfall data, yield for 2002/03 (Oct.–Sept.) is forecast by the Malaysia Rainfall Regression Model (MRRM) at 3.69 tons per hectare. This is slightly below the 5-year average of 3.76 tons per hectare, and well below the 4.06 tons per hectare seen in 2000/01. The MRRM model is projecting a yield of 4.01 tons per hectare for 2001/02. This projection is likely too high because the excessively high rainfall of 363 mm in the fourth quarter of 2001 may have reduced pollination levels and will reduce yield in the third quarter of 2002 below what the model is projecting.
The Malaysian Palm Oil Board came out with an estimate of mature palm oil area in 2001 of 3.01 million hectares, 310,000 hectares lower than had been expected. As a result, mature area in 2001 increased just 63,000 hectares from 2000, less than the 128,000 hectares average increase over the previous 5 years. A large part of the reason why area increased slowly was the replanting program that was implemented by the Malaysian government. The program, which began in July 2001 and finished at the end of June 2002, was instituted to encourage producers to replace stands of trees that were more than 25 years old. According to the Malaysian Minister of Primary Industries, 198,000 hectares of trees were cut under the replanting program, which offered farmers MR1000 (US$263) for each hectare of land that was cut.
Using estimated area of 3.07 million hectares and the MRRM yield projection of 3.69 tons per hectare implies output of 11.3 million tons of crude palm oil for the 2002/03 marketing year. The MRRM projection is somewhat lower than the official USDA forecast for 2002/03, which is at 11.8 million tons. The MRRM implied output for 2001/02, using area estimated at 3.01 million hectares, is 12.0 million tons, higher than the official USDA estimate of 11.7 million tons.
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.
