According to a Reuters survey, Malaysia’s palm oil inventories end-November likely shrank slightly from October as output slowed while imports jumped.
The reports said stockpiles in the world’s second-largest producer were seen falling 0.47 percent from the previous month to 2.39 million tonnes, according to the median estimate of six traders and analysts polled by the news agency.
Production is pegged to decline 5 percent from October to 1.72 million tonnes.
“The La Niña weather phenomenon is underway in the Pacific Ocean in October and strengthened in November, impacting key oil palm planted areas in Borneo and potentially the east coast of Malaysia,” said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.
Exports are expected to climb 3 percent to 1.55 million tonnes, while imports likely rose 16.8 percent.
Strong demand for palm oil has been underpinned by a widening price discount against rival oils including soy oil.
The ringgit looks set to rise with a new government in place in Malaysia, Varqa said, adding that will make exports expensive, but that it may be offset by higher Indonesian palm prices inflated by levies and taxes.
The ringgit, palm’s currency of trade, has strengthened in the past week after the appointment of new Prime Minister Anwar Ibrahim, making the edible oil more expensive for buyers holding other currency.
The Malaysian Palm Oil Board is scheduled to release its data on Dec. 13.
Breakdown of November estimates (in tonnes):
Range Median
Production 1,632,200-1,759183 1,722,912
Exports 1,353,400-159,4006 1,549,446
Imports 50,000-117,500 77,500
Closing stocks 2,316,631-2,512,100 2,392,337
* Official stocks of 2,403,719 tonnes in October plus the above-estimated output and imports yield a total November supply of 4,204,131 tonnes. Based on the median of exports and closing stocks estimate, Malaysia’s domestic consumption in November is estimated to be 262,348 tonnes.
Source: Reuters
