Thursday, November 17, 2011

La Nina to stir severe rains in oil palm growing Malaysia

KUALA LUMPUR (Nov 17):'' A weak-to-moderate La Nina weather pattern will trigger severe monsoon rains in Malaysia's key oil palm growing regions, the weather office said on Thursday, potentially disrupting harvesting and boosting prices.

The Malaysian Meteorological Department told Reuters in a statement the presence of the La Nina in the equatorial central Pacific Ocean will worsen the northeast monsoon season that runs from this month till next March.

The weather office said for November and December, parts of the key oil palm growing state of Sabah on Borneo island as well as Johor and Pahang in peninsula Malaysia will experience 20-40 percent more rainfall than their long term means for the period.

These three states alone account for 60-70 percent of total Malaysian production.

"Five to six heavy rainfall episodes are expected to occur during the season," the department said. "Heavy rain over a period of two to three days can cause floods to occur over the low-lying areas near the river banks."

This is the second time the La Nina weather condition has developed globally, which usually brings heavy rains to Southeast Asia's palm oil producers and can trigger drought conditions in soy exporting South America.

In the first quarter of 2011, palm oil prices surged on massive floods in Johor and Sabah hitting production, which stoked fears of food-driven inflation globally.

Heavy rains tend to limit harvesting rounds in PLANTATION []s and floods can disrupt the palm oil supply chain.

Industry analysts such as Dorab Mistry have cut their output estimates for Malaysia and Indonesia in response to prospects of La Nina weather affecting yields, forecasting prices to go above 3,300 ringgit in January.

Following is a detailed forecast on rainfall in major oil palm growing states in Malaysia by the meteorological department:

* For November and December, eastern Pahang state will get 40 percent more rainfall than the long term mean. Other states such as Perak, Johor, west Pahang, Sabah (Kudat, West Coast and Sandakan divisions) will experience 20-40 percent more rainfall.

* For January 2012, Sabah (West Coast and Kudat divisions) will get 40 percent more rain fall. Perak, eastern and nothern Pahang, eastern Johor and Sabah (Sandakan, Tawau and interior divisions) will get 20-40 percent more rainfall.

* For February and March 2012, only Sabah's Kudat division will get 40 percent more rain fall than the long term mean while the other oil palm growing states will get 20-40 percent more rain. - Reuters

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