Despite Malaysia experiencing one of its worst flood seasons, crude palm oil (CPO) production has remained largely unaffected.
The flood-affected states accounted for almost half of the country's production from January to October 2024, according to TA Research.
CPO prices have surged in recent months, reaching RM5,296 per tonne after a remarkable 40% increase since September.
The surge was driven by concerns about the rainy season and flooding, but experts believe the trend will not last long.
Prices are projected to average around RM3,800 per tonne by mid-2025, as production rebounds and market demand weakens.
FGV Holdings expects a small decline in fresh fruit bunch (FFB) production due to the weather changes this season while IOI Corp will only experience a minimal impact.
Production typically declines early in the year but picks up in the second quarter.
Meanwhile, smaller plantation companies, such as Hap Seng Plantations and Sarawak Plantation, have benefited from the recent rise in crude palm oil (CPO) prices.
However, experts warn that the high prices may not last long.
Competition from soybean oil and changes in production patterns could cause prices to fall by the end of 2025.
