Malaysian crude palm oil stocks in August rose 6.22 per cent to the highest in six months as exports normalised after huge purchases the month before and output posted weak growth.
The Malaysian Palm Oil Board (MPOB) said yesterday that stocks in the world’s second largest producer of the vegetable oil rose to 1.42 million tonnes, in line with what is seen as minimum stocks needed for the refining industry to function normally, and the highest seen since February.
The rise in stocks missed market expectations of a 7.3 per cent climb to 1.43 million tonnes forecast in a Reuters poll early this week.
“Stocks in August are going to build up in the next two months despite plantation workers taking leave for Ramadan as one cargo surveyor has reported a decline in exports,” said a trader, referring to Indonesian workers fasting during the Muslim holy month that began late August. “Prices could hit the RM2,000 level, it’s possible.”
Benchmark Malaysian palm oil prices on the Bursa Malaysia Derivatives Exchange rose 2 per cent to RM2,223 by midday, just before the data was released.
Traders had priced in expectations of weaker September 1-10 export data the day before, which was confirmed when cargo surveyor Intertek Testing Services reported a 14.5 per cent drop yesterday.
“The concern now is that the normalising of August exports is heralding the start of a slowdown in shipments from September,” said another trader.
“There has been a decline in the first 10 days of September because sellers were not forthcoming with their supplies with prices being too low and Ramadan buying from the Middle Eastern countries and Pakistan has slowed.”
MPOB pegged exports in August down 9.49 per cent at RM32 million tonnes, much less than the production level of 1.49 million tonnes, although the 0.17 per cent pace of output growth was still weak, thanks to dry weather. – Reuters Source : Business Times]]>