Colombia's palm oil production will fall in 2016 because of drought brought on by the El Nino weather phenomenon, a truckers strike and the cancellation of import tariffs on oils, the head of its palm federation said on Thursday, but may nearly double over the next four or five years.
The Andean country is the world's fourth-largest producer of palm oil behind Malaysia, Indonesia and Thailand, with an output of 1.2 million tonnes of the foodstuff per year, Jens Mesa, the head of the Fedepalma growers group told Reuters. "We are seeing a production situation where the expected growth compared with 2015 probably won't happen because climate conditions affected several areas more strongly than we expected," Mesa said in an interview at his office in Bogota.
"Last year we had 1.27 million tonnes and we've had a slight fall in output so far this year," he said. "We were anticipating around 1.35 million tonnes, but I think it will even be hard to meet last year's level." He declined to give an estimate on output this year.
Biodiesel sales in the country have fallen due to the ongoing truckers strike, now in its 38th day, which has also affected nearly 80 percent of palm industry transport, according to Fedepalma estimates. "If there are fewer sales of biodiesel there are fewer purchases of palm oil," Mesa said. "The government also took some measures to eliminate tariffs on oil imports to fight inflation." About a third of production, some 400,000 tonnes, is exported each year, he said. Palm oil is used in foodstuffs, biofuels, cosmetics and cleaning products. Future export figures will depend on how much the local market purchases, Mesa said, but they appear to be on the up.
"The most likely outcome is that we continue to grow participation in export markets, because there are many areas which haven't started producing and the biodiesel program in Colombia has been very stable in volumes." Output could nearly double to 2 million tonnes within four or five years, Mesa said, depending on the productivity of the palm trees.
Earlier on Thursday President Juan Manuel Santos announced tougher security measures meant to tamp down violence at strike protests and clear blockades. The strike has increased food prices around the country. There are around 500,000 hectares (1.2 million acres) of palm crops in Colombia, Mesa said, and prices of palm are steady at between $500 and $600 per tonne.