KUALA LUMPUR, March 18 — Palm oil output in a key growing state in Malaysia, the world’s second largest producer of the commodity, is expected to fall

KUALA LUMPUR, March 18 — Palm oil output in a key growing state in Malaysia, the world’s second largest producer of the commodity, is expected to fall 15 per cent as two major rivers irrigating plantations have sunk to dangerously low levels.

The southern state of Johor in mainland Malaysia, and the top producing state of Sabah on the island of Borneo, have experienced a prolonged dry spell driven by the El Nino weather condition that can axe yields and trigger a supply squeeze.

“The hot weather will go on till April or May and the immediate impact is a 15 percent decline in production this month, in this region,” said one planter in Johor, which accounts for a fifth of the Southeast Asian country’s output.

Two rivers in Johor, Sungai Muar and Sungai Benut, are at “danger” levels, the website of Malaysia’s drainage and irrigation department showed on Thursday. One of the state’s seven rivers was on the “high alert” list. Read more