“All refineries in Sabah are full of crude palm oil due to production going so much higher. This has also been happening in west Malaysia,” said a poll contributor from Sabah.
“Pressure is mounting for refiners to find their stocks a home and the most appropriate action would be to sell aggressively. In Indonesia, I was told their stocks have exceeded 2 million tonnes.”
Production in Indonesia, the world’s No 1. palm oil producer, along with Malaysia has recently rebounded after months of yield stress this year that settled in after a bumper crop in 2008 as well as heavy rains spoiling palm fruits.
Other poll respondents say Malaysia’s output will slow from December as the dry weather associated with the moderate El Nino weather condition that emerged in mid-2009 has limited the development of oil-rich female palm flowers.
“These flowers will mature from end of the year and weaken production. Stocks will be tight again as the next big wave of Asian buying comes in,” said a plantation official who contributed to the poll. — Reuters
Source : Business Times