| KUALA LUMPUR, March 24
KUALA LUMPUR, March 24 Malaysian buyers are
ramping up imports of Indonesian palm oil as local supply
battles to recover from the lingering impact of last year's
crop-damaging El Nino weather pattern.
Traders said world No.2 producer Malaysia was set to boost
imports of palm oil and related products from top grower
Indonesia by about 20,000 tonnes in March from typical monthly
volumes of around 40-50,000 tonnes.
The two countries churn out nearly 90 percent of the world's
palm oil, used to make products ranging from cooking oil and
chocolate to soap and cosmetics.
Some traders said shipments to Malaysia would likely remain
at higher levels in April as they expect Indonesia to cut its
export taxes on palm to around $3 per tonne from $18 currently.
Jakarta sets the tax rate each month.
"Imports from Indonesia could reach 60-70,000 tonnes (again)
next month, if the new tax kicks in," said one trader, declining
to be identified as he was not authorised to speak with media.
El Nino often brings scorching heat across Southeast Asia
that hurts palm's fresh fruit yields. Indonesia's trees are
typically younger than Malaysia's, however, so its crop can be
more resilient and quicker to recover.
Benchmark palm oil prices were trading at over
four-year highs in early January. Though they have since eased
by around 10 percent to 2,760 ringgit ($623.31) per tonne, that
is still way above levels seen at this time in 2016.
But further down the line, production is set to pick up
again. Leading analysts have forecast a recovery in output by
the second half of the year, driving down prices to around 2,500
ringgit per tonne.
($1 = 4.4280 ringgit)
(Reporting by Emily Chow; Editing by Joseph Radford)