By Ashley Tang
KUALA LUMPUR (Reuters) – Malaysia’s palm oil inventories are forecast to fall in October, marking their first decline in three months, due to lower output and higher exports, a Reuters survey showed on Tuesday.
Palm oil stocks are expected to drop to 1.92 million metric tons, down 4.64% from September, according to a median estimate of ten traders, planters, and analysts polled by Reuters.
Crude palm oil output is expected at 1.76 million metric tons, a 3.2% decline from the previous month.
“Stockpiles are projected to ease slightly from their September high, driven by a combination of increased exports and a seasonal slowdown in production,” said Darren Lim, commodities strategist at Singapore-based brokerage Phillip Nova.
Lim said crude palm oil production in the world’s second-biggest exporter of the edible oil was poised for a modest dip following the peak harvest surge experienced in the preceding months.
“On a brighter note, preliminary data from cargo surveyors for October already hints at a robust uptick in shipments, showcasing the resilience of the market and importers restocking inventories in anticipation of higher prices amid lower production,” he said.
Exports of palm oil products are forecast to increase by 5.64% to 1.63 million metric tons, a second straight monthly rise.
The Malaysian Palm Oil Board (MPOB) is scheduled to release its monthly data on Nov. 11.
Breakdown of October estimates (in metric tons):
Range Median
Production 1,657,959 – 1,850,000 1,763,638
Exports 1,600,000 – 1,727,942 1,629,973
Imports 9,000 – 50,000 10,000
Closing Stocks 1,732,854 – 2,170,000 1,920,443
* Official stocks of 2,013,837 tons in September plus the above estimated output and imports yield a total October supply of 3,787,475 tons. Based on the median of exports and closing stocks estimate, Malaysia’s domestic consumption in October is estimated to be 237,059 tons.
(Reporting by Ashley Tang; Editing by Janane Venkatraman)
