A view of a cart full with the fresh fruit bunches at a palm oil collection centre for smallholders in Banting, Selangor, Malaysia, June 10, 2022.

Malaysia’s palm oil production remained resilient despite potential disruption from floods that have hit several states in recent months, the Malaysian Palm Oil Board (MPOB) said on Monday.

"While localised disruptions may occur due to temporary waterlogging and harvesting delays, the overall impact on the country’s production is expected to be manageable,” MPOB director general Ahmad Parveez Ghulam Kadir told.

The Malaysian Meteorological Department said last month that the Northeast Monsoon, which began on November 5 last year, was expected to continue until March. Continuous heavy rainfall over a period of a few days could cause floods in low lying and flood prone areas, it warned.

Malaysia experienced its most severe flooding in decades in November last year, displacing more than 90,000 people. Another wave of floods in January forced thousands from their homes in the southern state of Johor, as well as in Sarawak and Sabah on the island of Borneo.

Sarawak and Sabah account for some 55% of Malaysia's 5.61 million hectares of palm oil plantations, and were responsible for 43.6 percent of crude palm oil production last year.

Ahmad Parveez said the MPOB would work closely with growers to help the industry recover.

“While some short-term effects are possible, Malaysia’s palm oil sector is well-prepared to safeguard its output and ensure steady global supply,” he said.

When asked about future palm oil demand from key, Ahmad Parveez said demand from India, China, and Europe was stable.

In India, he said refiners have shifted towards soybean oil due to better refining margins, but demand is expected to pick up ahead of the Muslim fasting month of Ramadan. I

In China, future imports will depend on price competitiveness and overall market conditions, he added.

“In Europe, demand remains relatively stable, though the delay in the EU Deforestation Regulation (EUDR) means there is no longer an urgency to stockpile. Imports may fluctuate based on price movements and how the industry adapts to regulatory changes.

"Palm oil’s competitiveness against soybean and sunflower oil will be the key factors influencing short-term demand trends in these markets,” he said.