Benchmark palm oil futures slipped almost 8% in February amid worries over declining demand, dropping to a two-month low last week. They stood around RM2,145 this afternoon.

“There has been a big success story for palm oil production growth… but that is history. Annual global palm oil production growth is expected to drop,” said Mielke, editor of the Hamburg, Germany-based newsletter Oil World.

“There is very strong demand for palm oil as the world’s dependence on palm oil is rising,” he said, speaking at a seminar in Kuala Lumpur.

Mielke forecast that global palm oil output would hit 75.26 million tonnes this year, up from 72.48 million tonnes in 2018. He added that Malaysian palm oil yields were in a declining trend due to a lack of replanting and a cutback in fertiliser use.

But, he added that high palm stockpiles were likely to weigh on prices.

“We should not be too bullish at this point in the current year,” Mielke said.

He forecast earlier this week that palm oil prices would recover in the next six to 10 months, and pegged 2019 output in Indonesia and Malaysia at 43 million tonnes and 20.1 million tonnes respectively.