(Corrects name of Fry’s consultancy firm to LMC International from EMC International)
By Emily Chow
KUALA LUMPUR, Oct 13 (Reuters) - Palm oil output in top global producer Indonesia will rise in the final quarter of 2016 compared with a year ago, recovering from a July-September drop that was the result of an El Nino weather pattern, said leading industry analyst James Fry.
Production of the tropical oil is forecast to decline overall this year due to last year’s crop-damaging El Nino weather event, which brought scorching heat to Southeast Asia and impacted palm yields in top growers Malaysia and Indonesia.
The expectation of rising supplies in the fourth quarter could weigh on benchmark palm oil prices, which have gained nearly 7 percent this year on tighter supplies. Palm oil was trading around 2,620 ringgit ($630.60) per tonne on Thursday afternoon.
“I think that Indonesian output fell 0.6 million tonnes year-on-year in Q3, but is now recovering at an accelerating pace with year-on-year growth of 0.4 million tonnes in Q4,” said Fry, chairman of commodities consultancy LMC International, speaking at an industry conference in Kuala Lumpur on Thursday.
Fry also expects Malaysian output to grow year-on-year from October to December this year.
Fry maintained his September forecast that global palm oil output will grow 4 million tonnes in the first half of 2017.
For prices, Fry held to an outlook of $650 a tonne on a free-on-board basis for November and December, followed by a brief rise in January and February and a decline to $550 a tonne later in 2017.
($1 = 4.1550 ringgit)
Reporting by Emily Chow; Editing by Tom Hogue