Malaysia end-November palm oil stocks seen hitting 4-month low as exports jump

07-Dec-2021 Intellasia | Reuters | 5:02 AM Print This Post

Malaysia’s palm oil stockpile at the end of November likely slipped to a four-month low as a surge in exports outpaced a small rise in production, a Reuters survey showed on Monday.

Inventories in the world’s second-largest palm oil producer were seen 3.5 percent down from the previous month at 1.77 million tonnes, according to the median estimate of 11 planters, traders and analysts polled by Reuters.

Production likely rose 1 percent from October to 1.74 million tonnes, its highest since September last year, while exports were forecast to expand 11.9 percent to 1.59 million tonnes.,

“Robust exports for November and recent record-high prices may see destination pipelines filled for December and deep negative margins, which may lead to staggered demand,” said Lee Toong Huang, general manager of palm oil producer Kwantas Oil.

Malaysia’s benchmark crude palm oil prices have gained more than 32 percent so far this year, hitting a record high of 5,220 ringgit ($1,236.38) a tonne on October 21, partly due to weak production caused by a shortage of labour during the pandemic.

Concerns over the Omicron coronavirus variant hurting demand and stalling economic recovery globally have weighed on prices in recent days, as the spread of the new strain causes alarm worldwide.

The virus is unlikely to hurt demand and prices in the short term, pending an assessment towards potential lockdowns and infections, said Marcello Cultrera, institutional sales manager and broker at Phillip Futures in Kuala Lumpur.

Palm oil production will likely remain soft until at least the first half of 2022, which would continue to provide cushion for prices in the coming months, despite caution of reaching peaks, top industry analysts said last week.

The Malaysian Palm Oil Board will release official data on December 10.

Breakdown of November estimates (in tonnes):

Range Median

Production 1,690,000-,1880,000 1,743,095

Exports 1,530,000-1,690,000 1,587,000

Imports 0-80,000 60,000

Closing stocks 1,700,000-2,000,000 1,769,682

* Official stocks of 1,834,103 tonnes in October plus the above estimated output and imports yield a total November supply of 3,656,505 tonnes. Based on the median of exports and closing stocks estimate, Malaysia’s domestic consumption in November is estimated to be 312,592 tonnes.

($1 = 4.2220 ringgit)


Category: Malaysia

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