Malaysian Palm Oil Council Russia's Post

Palm Oil Reserves in Malaysia Seen Rising to Six-Month High
2023-09-05 05:34:37.180 GMT By Anuradha Raghu (Bloomberg)

Palm oil stockpiles in Malaysia likely ballooned to the highest level in six months at the end of August as production in the second-biggest grower advanced while exports weakened.

Inventories climbed about 10% from a month earlier to 1.90 million tons, according to the median of 12 estimates in a Bloomberg survey of analysts, traders and plantation executives. That would mean stockpiles have jumped about 27% from the low in April, and could signal headwinds for benchmark palm oil prices.

Crude palm oil production rose about 7.5% to 1.73 million tons, the highest since October 2022, the survey showed.

Exports, however, are estimated to have dropped 1.5% to 1.33 million tons, after surging 16% a month earlier.

Palm oil futures in Kuala Lumpur have struggled to stay above the 4,000 ringgit psychological mark on concerns that high prices will erode demand. Prices retreated for a second day on Tuesday, dropping 0.6% to 3,961 ringgit a ton by the midday break.

Investors are also keeping watch on the pace of production in Malaysia, which is expected to peak between September and October. While stockpiles could accumulate in coming months, they’re expected to be capped by slower-than-expected output growth and steady consumer demand before key festivals.

Moving forward, exports could see a marginal recovery, driven by seasonal demand from China for the Golden Week festival and India for Diwali that’s celebrated in November, according to Sathia Varqa, senior analyst at Fastmarkets Palm Oil Analytics. India and China are the top palm importers.

More from the survey:
* Stockpile estimates ranged from 1.77 million to 1.97 million tons, production forecasts from 1.69 million to 1.77 million tons
* Export estimates were from 1.29 million to 1.43 million tons
* Imports are seen little changed at around 100,000 tons compared with 103,837 tons in July
* Local consumption estimates were from 250,000 tons to 340,000 tons
By: via Malaysian Palm Oil Council Russia