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Malaysia's palm oil exports are estimated to have declined to roughly 1.3 million tons in August, about 8% below July's level, according to a Bloomberg survey of eight plantation executives, traders, and analysts. The slowdown reflects weaker-than-usual festival demand from India, one of the commodity's largest buyers.
The drop comes against a backdrop of firm global prices. Palm oil has climbed approximately 7% during the third quarter and is trading close to a two-year high. Market participants are closely monitoring the potential impact of El Niño weather patterns on output in the coming months, while tighter supply is also expected as Indonesia, the world's top producer, channels more of its palm oil into domestic biofuel programs.
Commenting on the demand picture, one industry figure noted that purchases fell short of expectations because of the abundance of cheaper soybean oil in the global market, saying: 'Demand was lower than expected because of the availability of cheaper soy oil.'
On the supply side, survey respondents expect Malaysian production to have edged up about 2% in August to around 1.8 million tons, while inventories likely expanded by roughly 6% to their highest level since January. Malaysia's Palm Oil Board is scheduled to release the official August data by September 10.
For industry participants, the combination of softer Indian buying, weather-related risks, and Indonesia's biofuel-driven supply pull could keep prices volatile in the near term until the official figures are published.
Source: briefs.co