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KUALA LUMPUR, Jan. 10 (Reuters) – In late December, Malaysia’s palm oil stocks fell more sharply than expected as production plunged to its lowest level in nine months, data from the ‘National Palm Oil Board, further tightening stocks for 2022.
Inventories of the world’s second largest producer fell 12.88% from November to 1.58 million tonnes, their lowest since July, according to the Malaysian Palm Oil Board (MPOB).
This figure was much lower than that of a Reuters poll estimating a stock of 1.73 million tons.
“This is a bullish report, we have added record local usage with mediocre production figures made worse by flooding mainly on the east coast (of Malaysia),” said Paramalingam Supramaniam, director of brokerage firm Pelindung Bestari based in Selangor.
Crude palm oil production, already affected by a persistent labor shortage, fell 11.26% to 1.45 million tonnes.
Exports fell 3.48% to 1.41 million tonnes while domestic consumption jumped 31% to 373,128 tonnes.
“Given the very tight stocks with lower production expected in February, it is likely that supply chain coverage will be better covered as replenishment and Ramadan demand take place,” Marcello Cultrera, director of institutional sales and brokerage at Phillip Futures in Kuala Lumpur.
Here’s a breakdown of Malaysian Palm Oil Board figures and Reuters estimates for December (volumes in tonnes):
* indicates figures revised by the Malaysian Palm Oil Board
Reporting by Mei Mei Chu; Editing by Martin Petty
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