KUALA LUMPUR, Sept 7: Malaysia’s crude palm oil output in 2007 is forecast to decline 1.2 per cent to 15.7 million tons from a year ago as floods damaged plantations in a key producing

region.

“In the early part of the year, major floods destroyed newly matured trees and disrupted harvesting activities in the southern region,” the government said in its annual economic report on Friday.

Malaysia’s crude palm oil production for the first seven months of 2007 was down 7 per cent at 8.0 million tons, from 8.6 million tons in the same period last year.

Some plantation companies also attribute the slowdown to a natural resting period for the palm trees after three years of strong output.

But palm oil output in Malaysia, the world’s top producer, is likely to rise 2 per cent to 16 million tons in 2008.—Reuters