KUALA LUMPUR, Oct 27 (Reuters) - Palm oil production in Malaysia, the world’s second-largest producer, is expected to increase 15.5 percent this year and will grow by 2.5 percent in 2018, the government said on Friday.
Malaysian output is forecast to rise to 20 million tonnes this year, and to 20.5 million tonnes in 2018 due to better yields and expansion into matured areas, according to forecasts given in the government’s annual economic report released ahead of Prime Minister Najib Razak’s announcement of the 2018 budget.
In 2016, production was 17.3 million tonnes, the report said.
Average prices for palm oil are also projected to rise because of higher demand.
“Palm oil price (in 2018) is expected to increase to an average of 2,750 ringgit per tonne bolstered by higher demand, particularly from China, the (European Union) and India,” said the report.
The government expects an average palm oil price of 2,700 ringgit ($638) per tonne this year. ($1 = 4.2330 ringgit) (Reporting by KL Bureau; Editing by Christian Schmollinger)