Malaysia Palm Oil Stock Hit 8-Month Low

MALAYSIA’S palm oil stocks dropped to an eighth-month low in May as

foreign and local demand outpaced a recovery in production, data from

an industry regulator showed yesterday.

The Malaysian Palm

Oil Board said stocks in the world’s No.2 palm oil producer fell 3.71

per cent to 1.56 million tonnes, lower than market expectations for a

0.6 per cent drop.

“This is friendly number. Production

growth has yet to translate into a stock rise because exports and local

consumption are still robust,” said a trader with a foreign

commodities brokerage, adding that the market could add another RM10

when it reopens.

The benchmark August contract on the Bursa

Malaysia Derivatives Exchange edged RM1 higher to RM2,419 a tonne by

the midday break and ahead of the data release.

Production rose 6.06 per cent to 1.31 million tonnes, in line with

market forecasts, as yields started improving in the key palm oil

growing state of Sabah on Borneo island after months of El Nino-driven

hot weather that slowed output.

Exports gained 5.96 per cent

to 1.29 million tonnes in May as top buyers like China and India did

some restocking.

The momentum may continue in June with cargo

surveyor Intertek Testing Services reporting a 22.7 per cent increase

for June 1-10 from a year ago as China stepped up buying.

Based on trader calculations on Malaysian Palm Oil data, domestic

consumption in May stood close to 170,000 tonnes as some palm oil was

channeled into the government’s biodiesel blending programme.

According

to the MPOB, exports of palm kernel cake increased 24.32 per cent to

182,618 tonnes, oleochemical rose 1.04 per cent to 179,701 tonnes while

biodiesel dropped 43.36 per cent to 9,668 tonnes.

CPO imports in

May rose 5.02 per cent to 110,621 tonnes while processed palm oil

imports declined 26.33 per cent to 3,776 tonnes. – Reuters, Bernama

Source : Business Times

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