Malaysia’s palm oil stocks in late October rise as exports plunge
Malaysia’s palm oil stocks likely rebounded at the end of October, supported by a drop in exports amid declining production.
Stocks of palm oil from the world’s second-largest producer are expected to rise 3.4% to 1.81 million tonnes, according to a median estimate of nine growers, traders and analysts polled by Reuters.
Production is expected to decline 0.98% to 1.69 million tonnes. It probably fell for a second consecutive month to its lowest level in three months, at the end of the peak production season.
The decline, much lower than historical trends, reflects the current severe shortage of foreign workers, aging trees due to slow replanting, slower planting rates and lower fertilizer input due to logistics issues, Ivy Ng, regional manager of plantation research at CGS-CIMB Research, said in a note.
Exports likely fell 11.7% to 1.41 million tonnes, as data from freight experts showed a slowdown in shipments to major buyers, India and the European Union.
“We suspect that the drop in exports could be partly due to high prices and low supply from Malaysia,” Ng said.
Benchmark prices for Malaysian FCPOc3 crude palm oil hit record highs of 5,220 ringgits ($ 1,255.71) per tonne in October due to the global shortage of edible oils.
The Malaysian Palm Oil Board will release official data on November 10.
Breakdown of October estimates (in tonnes):
Closure of actions
* Official stocks of 1,746,520 tonnes in September plus the production and imports estimated above give a total October supply of 3,656,505 tonnes. Based on the median of exports and estimated ending stocks, Malaysia’s domestic consumption in October is estimated at 312,592 tonnes.
Source: Reutres (Reporting by Mei Mei Chu; editing by Rashmi Aich)