Malaysian Palm Oil Stocks Seen at Six-Year High as Exports Decline

A survey showed that Malaysia’s palm oil stocks jumped to their highest level in more than six years as exports declined in November.

Stocks rose by 10% from the previous month to 2.71 million tonnes, according to the median of 11 estimates in a survey of plantation company officials, traders, and analysts.

This is the highest level since April 2019 and represents a 47% increase compared with last year.

Palm oil reserves have been expanding since March, and elevated stocks could put pressure on prices of the tropical oil.

Futures briefly fell below RM4,000 per tonne in November as demand from India, the largest importer, declined after the end of its festive season.

Exports fell by around 15% to 1.43 million tonnes after jumping by nearly 19% in the previous month.

The Malaysian Palm Oil Board (MPOB) is scheduled to publish its monthly data on December 10.

Crude palm oil production in Malaysia, the world’s second-largest producer, fell by 2.9% to 1.98 million tonnes after an 11% jump in October, according to the survey.

Paramalingam Supramaniam, director at brokerage Pelindung Bestari Sdn Bhd, said peak production months have ended and the market is entering the low-output months, but demand has been relatively inactive.

He added that market participants are waiting for confirmation of the size of Malaysian stocks, and any figure above 2.6 million tonnes would be considered bearish for prices.

More Survey Results:

• Stocks were estimated between 2.65 million and 2.78 million tonnes, while expected production ranged between 1.86 million and 2.13 million tonnes.
• Export forecasts ranged between 1.30 million tonnes and 1.52 million tonnes.
• Imports were estimated at 40,000 tonnes, compared with 36,283 tonnes in October.
• Domestic consumption ranged between 270,000 tonnes and 490,000 tonnes.

Source: The Edge