JAKARTA, July 18 (Reuters) - Crude palm oil output at Cargill will be unchanged at 300,000 tonnes this year, the U.S. agribusiness company said on Wednesday, as dry weather in Indonesia hurts production.
Crude palm oil shipments from the world's top producer have been hit by dry weather this year. For most of the archipelago, the rainy season is from October until April, although this can fluctuate.
"Why no improvement? We've gone through dry spells," said John Hartmann, chief operating officer at Cargill Tropical Palm Holdings, which runs the company's palm oil plantations, all of which are in the archipelago.
"The last two months have been very dry, and it's having an impact on our production," Hartmann told Reuters.
Cargill's plantations are in South Sumatra and West Kalimantan.
"Kalimantan was down and is recovering, and now we're seeing the down cycle go through Sumatra," Hartmann said.
Minneapolis-based Cargill, one of the world's largest privately held corporations, has about 70,000 hectares of palm oil plantations, up 6,000 hectares on 2011, said Hartmann.
"I don't know if it is an El Nino type of impact or not but certainly we went through a three-year cycle of above average rainfall, and now for the last 12 months or so it's been below average," he added.
Indonesia is not the only major commodity producer suffering from dry weather. The U.S. grain belt has been scorched by the worst drought since 1956, cutting estimated output and quality of corn and soybean crops, and bumping up benchmark global prices. (nL2E8IGFYC)
Malaysian crude palm oil futures dropped to a near three-week low on Wednesday, as traders booked profits partly on weaker exports and better production outlook in Malaysia after the U.S. weather-fuelled rally.
Weather, softening demand and falling oil prices could all play a role in prices for the second half, said Hartmann, who was unable to give an exact forecast.
