Malaysia’s palm oil stocks hit 4-month low in late November as exports surge

  • November stocks were down 3.5% to 1.77 mln T – survey
  • Production up 1% to 1.74 mln T – survey
  • Exports up 11.9% to 1.59 mln T – survey
  • Data from the Malaysian Palm Oil Board is due on December 10

KUALA LUMPUR, December 6 (Reuters) – In late November, Malaysia’s palm oil stocks likely fell to their lowest level in four months as the rise in exports outpaced a slight increase in production, revealed on Monday a Reuters investigation.

Inventories of the world’s second-largest palm oil producer fell 3.5% from the previous month to 1.77 million tonnes, according to the median estimate of 11 planters, traders and analysts polled by Reuters.

Production is likely to rise 1% from October to 1.74 million tonnes, its highest level since September last year, while exports are forecast to increase 11.9% to 1.59 million tons. ,

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“Robust exports for November and recent record prices could see destination pipelines filling up for December and significant negative margins, which could lead to staggered demand,” said Lee Toong Huang, general manager of the oil producer. Kwantas Oil palm.

Benchmark prices for crude palm oil from Malaysia have risen more than 32% so far this year, reaching a record 5,220 ringgits ($ 1,236.38) per tonne on October 21, partly in due to low production caused by a labor shortage during the pandemic.

Concerns about the Omicron variant of the coronavirus damaging demand and slowing economic recovery globally have weighed on prices in recent days, as the spread of the new strain raises alarm bells around the world. Read more

The virus is unlikely to hurt demand and prices in the short term, pending an assessment of potential lockdowns and infections, said Marcello Cultrera, director of institutional sales and brokerage at Phillip Futures in Kuala Lumpur.

Palm oil production is likely to remain weak until at least the first half of 2022, which will continue to provide a cushion for prices in the months to come, despite cautious about spikes, said last week key industry analysts. Read more

The Malaysian Palm Oil Board will release official data on December 10.

Breakdown of November estimates (in tonnes):

* Official stocks of 1,834,103 tonnes in October plus the production and imports estimated above give a total November supply of 3,656,505 tonnes. Based on the median of exports and estimated ending stocks, Malaysia’s domestic consumption in November is estimated at 312,592 tonnes.

($ 1 = 4.2220 ringgit)

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Reporting by Mei Mei Chu; Editing by Subhranshu Sahu

Our Standards: Thomson Reuters Trust Principles.

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Felix J. Dixon