Malaysia’s late-February palm oil stocks beat expectations as exports and domestic use fall

Malaysia, the second-largest producer and exporter of palm oil, reported better-than-expected end-of-month stocks in February as local consumption and exports fell, the country’s official industry body said. , the Malaysian Palm Oil Board, or MPOB, on March 10.

Palm oil ending stocks fell to 1.52 million tonnes at the end of February, down 2.1% from the end-January stock level of 1.55 million tonnes. Exports fell 5.3% on the month to 1.09 million tonnes in February, according to MPOB data.

According to a survey by S&P Global Commodity Insights, a median of eight industry estimates expect end-February stocks to fall to 1.29 million tonnes, with exports pegged at 1.21 million tonnes.

The MPOB has proposed a ‘shock’ to Malaysian palm oil stocks at the end of February amid surprisingly weak exports and domestic consumption remaining at just 223,000 tonnes despite festivals, Anil Kumar Bagani says , head of research at Sunvin Group. Note March 10.

The data comes a day after palm oil futures soared on Malaysia’s commodity exchange amid news of Indonesia’s increased domestic obligations to oil suppliers. palm oil has heightened concerns about availability for vegetable oil buyers, who have already been hit by halts to sunflower oil shipments from Ukraine and Russia.

Palm oil futures for April and May rose more than 10% on March 9, triggering a pause in trading after arch-rival Indonesia’s revised export curbs led to strong market momentum. purchase, trade sources said.

May’s most active crude palm oil futures on Malaysian exchange BMD were trading down 153 points at MR 6,921 ($1,653.37) in afternoon trading on the 10th March, after hitting 7,057 MR/tonne and hitting the limit at 3:49 a.m. pm local time on March 9.

“Lower exports and lower local consumption compared to market expectations lead to higher stocks – this was a surprise as most surveys estimated ending stocks 150,000 to 200,000 tonnes lower,” Marcello said. Cultrera, sales manager and derivatives dealer at Phillip Futures, based in Kuala Lumpur. told S&P Global.

Higher-than-expected inventory levels could push palm oil futures prices down in the third month to levels of 6,385-6,400 MR/tonne, Cultrera said.

Leading industry analysts expect record prices to continue over the coming months as global edible oil inventories remain tight due to disruption in sunflower oil shipments from the United States. Black Sea as well as lower production in Argentina, the largest exporter of soybean oil.
Source: Platts

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Felix J. Dixon