KUALA LUMPUR (Sept 11): Malaysia’s palm oil inventory in August dropped 10% on year to 2.2 million metric tons, marking the first on-year decline since July 2017, as export demand grew at a faster pace than production mainly due to strong demand growth from India, latest data show. But MIDF Research expects growth in export demand to taper off as India increased its import duty on Malaysian refined palm oil by 5% on Sept. 4. Advertisement
Thus the broker believes the weaker export demand outlook amid the high production season in 2H will cause inventory to go up, providing some resistance in the recovery of crude palm oil prices. MIDF maintains a negative view on plantation sector with an unchanged CPO target price of MYR2,090 a metric ton by end-2019.
Source : The Edge Markets