Overall, Malaysia’s CPO production surged to 1.73m tonnes versus 1.71m tonnes in the previous year owing to the better contribution from most of the states except for Perak, Kelantan, Selangor, and Terengganu. On year-on-year basis, Malaysia’s OER dropped to 19.67% from 19.86% impacted by a slow intake of foreign labour. MIDF expects production to improve further subsequent to the positive development of foreign labour intake, particularly from Indonesia which resumed in August.
Palm oil (PO) export volume gained in August, rose by +11.3%yoy despite slower on a month-on-month basis to 1.30m tonnes as traders seek more PO due to price competitiveness against US’s SBO c. USD477 discount parity based on recent USDA data. Most usual major importing countries continued to see low demand, especially from China, India, and US down 51%. Furthermore, intake from middle east countries such as Iran, Saudi Arabia, and Turkey also declined in the month following positive development in sunflower oil on the reopening of Black Seaport in Ukraine.
Closing stockpiles in August-22 increased to 2.09m tonnes vs. 1.88m tonnes on low export demand and a spike in output. Both stocks, CPO and PKO are up +5.8%yoy and +11.7%yoy respectively, driven by sturdy contribution from peninsular, Sabah as well as Sarawak areas.’
MIDF anticipates the Malaysian palm oil stockpiles to improve in 3-4Q supported by more boots on the ground that began last month.
