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Malaysia's palm oil stocks hit 3-month high in May despite export boost
Malaysia's palm oil stocks rose 0.5 percent from the previous month to 1.75 million metric tons, the highest since February, the Malaysian Palm Oil Board (MPOB) said.
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Empty fruit bunches, the by products of oil palm fruit processing, are seen this stokc photo. (Shutterstock/KYTan)
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alaysia's palm oil stocks rose marginally to a three-month high in May, as strong exports were offset by a rebound in production, the industry regulator said on Monday.
Malaysia's palm oil stocks rose 0.5 percent from the previous month to 1.75 million metric tons, the highest since February, the Malaysian Palm Oil Board (MPOB) said.
The data from the world's second-largest palm oil producer after Indonesia could potentially weigh on benchmark futures. Prices were down about 0.6 percent by the midday trading break.
Crude palm oil production gained 13.48 percent from April to 1.70 million tons, the biggest in six months.
Palm oil exports also rose to a six-month high of 1.38 million tons, up 11.66 percent from April, the MPOB said.
A Reuters survey had forecast May inventories at 1.75 million tons, with output at 1.65 million tons and exports at 1.41 million tons.
"The growth in production has far exceeded industry expectations," said a New Delhi-based dealer with a global trade house.
"If this trend continues in the coming months, prices could come under pressure, especially if exports don't rise above 1.5 million tons, which looks difficult."
The MPOB report is neutral for the market, said Anilkumar Bagani, research head of vegetable oils broker Sunvin Group.
Palm oil's discount to rival soybean and sunflower oil makes it attractive to price-sensitive buyers such as India, he said.
