The increase in palm oil production in 2019 will be reduced

palm oil Production in Indonesia, which is the world's largest manufacturer of this product, in 2019 could reach 43 million tons, reports Reuters. In 2017 this figure was 36.5 million tonnes in 2018 – 42 million tons.

Malaysia will also increase palm oil production from 19.5 million tons in 2018, to 20 million tonnes in 2019, with peak production in October-November.

Experts believe that the price of palm oil in the region will grow by about 3% to 574 $/t. the Reduction of growth rates of production and rising prices associated with aging trees and the need to reduce the load on the plantation after two years of abundant harvests.

Support the price of palm oil increase in production of biodiesel, which stimulate the governments of both countries.

is Expected to increase demand for palm oil from India, which at the beginning of 2019 has reduced the import duty on these products.

on the other hand, a protracted dispute between the US and China reduces the price of soybeans, which puts pressure on the quotations of palm oil. The EU's intention to limit the use of palm oil in biofuel production to avoid deforestation, improve the environmental situation in Indonesia and Malaysia is also affecting the prices. So, in December 2018, France has announced that from 2020 the country will be prohibited from using palm oil in the production of biofuels. In response, the Prime Minister of Malaysia called on the President of Macron to abolish the ban and warned of a possible halt in the negotiations to establish a free trade zone between the EU and Malaysia and restricting exports of French goods into the country.

In 2017, the volume of trade between France and Malaysia amounted to 4.4 billion $, which is 1.26% of the total Malaysian trade volume.

Palm oil is the main source of income for Malaysia, which, together with Indonesia provides 90% of world production of this product.