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Malaysia palm oil stocks shrink as exports jump
The drop in stocks could support the rally in benchmark futures, which are already hovering near their highest levels in more than two years. Malaysia is the world's second-largest producer of palm oil after neighbouring Indonesia.
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A mini tractor grabber collects palm oil fruits at a plantation in Pulau Carey, Malaysia, on January 31, 2020. (REUTERS/Lim Huey Teng)
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alaysia's palm oil stocks shrank the most in seven months in October as exports surged, production fell and domestic consumption increased, the country's industry regulator said on Monday.
The drop in stocks could support the rally in benchmark futures, which are already hovering near their highest levels in more than two years. Malaysia is the world's second-largest producer of palm oil after neighbouring Indonesia.
Malaysia's palm oil stocks at the end of October were down 6.32 percent from the previous month at 1.88 million metric tons, the first decline in inventory in three months, the Malaysian Palm Oil Board (MPOB) said.
Crude palm oil production was also down 1.35 percent at 1.80 million tons, while palm oil exports climbed 11.07 percent to 1.73 million tons, the board said.
In addition, domestic palm oil consumption jumped 50 percent to 208,418 tons from the previous month.
A Reuters survey had forecast inventories at 1.92 million tons, with output expected at 1.76 million tons and exports at 1.63 million tons.
The MPOB data for October is bullish for the market, as inventories declined more than expected and exports surpassed trader expectations, said Anilkumar Bagani, research head of Mumbai-based vegetable oil broker Sunvin Group.
Addressing the outlook for November, a New Delhi-based dealer with a global trade house added: "Palm oil prices rose too much and too quickly. Demand has been faltering, which could lead to a buildup in stocks this month."
Exports of Malaysian palm oil products for Nov. 1 - 10 fell 14.6 percent from a month before to 419,094 tons, independent inspection company AmSpec Agri Malaysia said on Monday.
