August Palm Oil Stockpile Rises to 6-Month High

PETALING JAYA: Palm oil stockpile in Malaysia rose 6.2% in August to a six-month high, as exports dropped from an abnormally high month in July, while output from plantations improved, the Malaysian Palm Oil Board (MPOB) said yesterday. “Demand had slowed down a lot and will continue to drop after the Hari Raya holidays,’’ said Jim Teh, a palm oil trader at Interband Group in Kuala Lumpur. The slower export sales would bump up inventory and this would limit crude palm oil (CPO) price upside potential in the coming months, analysts said. Teh noted that CPO futures contract on Bursa Derivatives were well supported by the big producers, although the overall market volume had been declining in the past weeks. The most active palm oil futures on Bursa Derivatives rose as much as 2.8% yesterday before MPOB’s latest industry data were released during the lunch break, but faltered in the afternoon session as the market digested the bearish offical numbers. At the close, CPO for delivery in November added RM5 to RM2,184 per tonne. Another palm oil trader said while the possibility of CPO testing the RM2,000-a-tonne level soon had risen after the weak MPOB data, the vegetable oil performance would continue to mirror main rival soyoil’s movement. CPO price had jumped 28% year-to-date, driven by concerns that worldwide edible oil shortage would keep demand high. Palm oil is the cheapest edible oil available and the most widely consumed after soyoil. Palm oil export in August fell 9.5% to 1.32 million tonnes from 1.45 million recorded in July, MPOB’s latest data showed. Meanwhile, production improved 0.17% in August to 1.49 million tonnes compared with July. Analysts had said that the July export volume was “seasonally” strong due to stocking activities by buyers from the Middle East and Pakistan ahead of the fasting month. Independent cargo surveyor Societe Generale de Sur-veilance yesterday estimated that CPO exports from local ports had declined 17% during the first 10 days of Septem-ber compared with the same period last month. Source : The Star

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