KUALA LUMPUR, Jan 10 — Palm oil prices will this year average between RM2,700 and RM2,800, Malaysia’s minister of plantation industries and commodities said today.

That would be well below current prices for the edible oil, used to churn out everything from ice-cream to shampoo and biofuels, which stood around RM3,135 this afternoon.

"(Palm oil) prices have fluctuated quite substantially... because there is a lot of offtake by certain countries and production also came down (in 2016),” minister Mah Siew Keong said at an industry event.

Palm oil prices averaged RM2,741 in 2016, according to Reuters data. The government in Malaysia, the world’s No.2 producer of the edible oil, gives the average for last year as RM2,600.

Mah added that he expected Malaysia’s 2017 palm output to grow from the previous year, without specifying figures.

Malaysia produced 17.3 million tonnes of palm oil in 2016, down 13 per cent from the year before due to dry conditions from a strong El Nino weather pattern. — Reuters