Lang
Data from the sector regulator showed on Monday that Malaysian palm oil stocks rose for the eighth consecutive month to their highest level in six and a half years by the end of October, as production, the largest in a decade, exceeded the jump in exports.
Higher stocks in the world’s second-largest producer of the tropical oil could put pressure on benchmark Malaysian futures, which are trading near a four-month low.
The Malaysian Palm Oil Board (MPOB) said Malaysia’s palm oil stocks rose by 4.44% from the previous month to 2.46 million tonnes in October, the highest level since April 2019.
MPOB added that crude palm oil production rose by 11.02% month on month to 2.04 million tonnes, its highest level since August 2015.
Palm oil exports increased by 18.58% to 1.69 million tonnes, the strongest growth rate in a year.
A Reuters survey had forecast stocks at 2.44 million tonnes, production at 1.94 million tonnes, and exports at 1.48 million tonnes.
Anilkumar Bagani, head of research at Mumbai-based vegetable oil brokerage Sunvin Group, said weaker exports in the first ten days of November and higher palm oil production in the first week are likely to limit price gains.
A New Delhi-based trader at a global trading company said: “Malaysia’s palm oil stocks appear to have finally peaked.”
The trader added that production should begin slowing from November, while the key factor to watch will be export demand, which may rise as palm oil has now become cheaper than other vegetable oils.