KUALA LUMPUR, Jan 19 — Palm oil futures could drop this year to their lowest level since February 2009 despite poor weather in the top growing countries and trade may be volatile because of uncertainty in the global economy, senior industry officials said today.

Unfavourable weather in top growers Indonesia and Malaysia could cause some tightness in supply but any El Nino phenomenon this year will be weak and therefore not as damaging to output as feared, the officials told a conference in Kuala Lumpur.

Malaysian palm oil prices, which set the tone for global prices, are expected to trade between RM1,820 and RM2,750  per tonne in 2015, said Ramli Abdullah, head of the economic unit of the Malaysian Palm Oil Board, revising the lower end of the range from the RM1,800 given earlier in his presentation.

In October he had forecast a much narrower range of RM2,300-RM2,500 for this year.

The April contract was trading at around RM2,313 today.

Ling Ah Hong, director at Malaysian-based plantation research company Ganling Sdn Bhd, also doubted a weak El Nino would cause much disruption to palm oil supplies in Southeast Asia.

Ling said the absence of severe weather threats meant benchmark palm prices would be driven by global demand factors, oilseed supplies and crude oil prices.

Top grower Indonesia has experienced bouts of drought over the past two years that may curb output in 2015, while No.2 producer Malaysia was struck by its worst monsoon flooding in decades in December.

Ramli said crude palm oil (CPO) output in Malaysia was expected to rise to a record 20.09 million tonnes in 2015, a little lower than his prediction of 20.5 million tonnes in October, before the monsoon rain and floods. Output in 2014 was 19.67 million.

“Serious floods in Peninsular Malaysia at the end of 2014 will give a spillover effect in CPO production in 2015,” Ramli said, adding this would be felt in the first quarter of the year, especially in February, when production would probably be at its lowest.

The floods disrupted harvesting and transportation of palm fruit to mills, while soaked fruit bunches produce lower-quality oil.

After February, monthly output of Malaysian palm oil is expected to gradually rise, peaking in September.

Exports of Malaysian crude palm oil and palm oil products will probably rise to 25.77 million tonnes in 2015 from 25.02 million in 2014, Ramli added.

Fadhil Hasan, executive director at the Indonesian Palm Oil Association, or GAPKI, expected Indonesia’s output to rise to 32.5 million tonnes in 2015 and forecast its exports of crude palm oil and palm products would rise to 21.6 million tonnes.

No figures for 2014 were available. — Reuters