At the end of January, palm oil stocks in Malaysia are considered stable, exports collapse
Malaysia’s palm oil stock at the end of January likely remained stable as production and exports from the world’s second-largest producer fell to an 11-month low, a Reuters survey showed on Monday.
Stockpiles in the Southeast Asian nation are expected to rise 0.34% from the previous month to 1.59 million tonnes, according to the median estimate of eight planters, according to traders and analysts polled by Reuters.
Production is expected to fall 10% to 1.3 million tonnes, falling for a third consecutive month to the lowest since February last year.
Exports are expected to fall by 21% to 1.12 million tonnes.
“We should see stronger demand from the second half of February on major importer restocking activities and Ramadan demand,” said Marcello Cultrera, institutional sales manager and broker at Phillip Futures in Kuala Lumpur.
Malaysia’s benchmark palm oil contract FCPOc3 hit a record 5,749 ringgits ($1,374.21) a tonne after Indonesia’s top producer made it mandatory for palm growers to sell a fifth of their production in the domestic market, disrupting world markets for edible oils.
Rising prices are likely to prompt key buyers such as India, China, Pakistan and several African countries to switch to rival soybean and sunflower oils, which are available at a lower price. palm oil for February shipments.
Over the next six months, more Indonesian market share will be taken (by Malaysia) amid continued shipping uncertainties related to Indonesia’s Domestic Market Obligation (DMO) rule, Cultrera said. .
The main buyer, India, last week imposed limits on stocks of oilseeds and edible oils that traders and processors can hold in a bid to control hoarding and halt rising prices.
The Malaysian Palm Oil Board will release official data on February 10.
Source: Reuters (report by Mei Mei Chu; editing by Ed Davies)