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Indonesian palm oil stocks rose 50% month-on-month to 3.04 million tonnes by the end of April, the highest level since May last year, following a decline in exports, according to data from the Indonesian Palm Oil Association (Gapki) released on Tuesday.
Exports fell 38.14% month-on-month in April to 1.78 million tonnes, driven by weaker demand from the European Union, India, the United States, Pakistan and Bangladesh.
Crude palm oil production in April reached 4.48 million tonnes, up from 4.39 million tonnes in March.
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The data align with expectations, as the higher price of palm oil relative to competing oils in April prompted buyers to switch to soybean oil, according to a New Delhi-based trader working for a global trading firm.
In May, palm oil began trading at a discount, which triggered a jump in exports from Indonesia — a development that may have helped bring down stocks by the end of the month, according to the trader.
He added: "Even in June, exports are expected to remain strong. Indonesia's move to cut the export tax has also helped support exports."
Source: The Edge Malaysia