Malaysia’s palm oil stocks expected to drop by end of November due to lower production (Platts survey)
Lower palm oil production in November from the world’s second largest producer, Malaysia, along with higher exports likely pushed the country’s palm oil stocks below 1.80 million tonnes, according to a report. S&P Global Platts survey.
Palm oil stocks stood at 1.78 million tonnes at the end of November, down 3.2% from 1.83 million tonnes a month earlier, according to a median estimate of seven analysts and traders. of the sector.
Exports for the month were up 10.9% from October to 1.57 million mt, while production fell 1% to 1.70 million mt, according to the survey.
“Going forward, December-February will be a period of lean production, which suggests that stocks may remain tight for the next 3-4 months,” said Aditya Jeripotula, head of research at the company. raw materials TransGraph Consulting.
The Malaysian Palm Oil Board, or MPOB, will release monthly supply and demand data on December 10.
Earlier data from MPOB showed Malaysia’s palm oil production between January and October was 15.03 million tonnes, compared to 16.32 million tonnes in the period 2020.
“We don’t see any major improvement in production until Q2 2022 due to the underlying labor issue as well as the seasonal factor,” Jeripotula said.
Malaysia’s oil palm plantations have suffered from labor shortages since last year as foreign workers were unable to return to work.
According to Sathia Varqa, founder of Singapore-based Palm Oil Analytics, there is a shortage of around 70,000 workers in oil palm plantations in Malaysia. As the country struggles to recruit 32,000 workers, the new omnicron variant of COVID-19 could delay that plan.
Palm oil prices, which hit their lowest level for two months after the omnicron variant was announced, rose 3% on December 7 amid market concerns over lower production.
However, Bursa Malaysia’s most active third-month derivative palm oil futures fell slightly to 4,840 MR / t ($ 1,147.74 / t) on December 9, reflecting losses of rival soybean oil after the United States said it could cut biofuel mandates for 2020 and 2021.