KUALA LUMPUR: Malaysia’s palm oil stockpile at end-Feb likely plunged to its lowest in 10 months, as production shrank for a fourth consecutive month while exports jumped, a Reuters survey showed on Friday.
Inventories are forecast to drop 11.4% from the month before to 1.38 million tonnes, the lowest since March 2021, according to the median estimate of nine planters, traders and analysts polled by Reuters.
That compares to 1.3 million tonnes recorded a year ago.
Output in the world’s second largest producer is seen falling 5% to 1.19 million tonnes, also at a 10-month low.
Exports are expected to rise 8% to 1.25 million tonnes, as buyers turn to Malaysia after top producer Indonesia introduced a requirement for exporters to sell a portion of their products domestically.
“There are increasing concerns on adequate palm supply levels for post-Ramadan restocking, with more subscriptions taking place in the cheaper forward months – mainly in the July-September period,” said Marcello Cultrera, institutional sales manager and broker at Phillip Futures in Kuala Lumpur.
Benchmark crude palm oil futures have rocketed to record levels of over 7,000 ringgit ($1,673.44) a tonne as Russia’s invasion of Ukraine disrupts sunflower oil supply from the key Black Sea region, further squeezing an already tight global market.
Analysts said prices could stay high for longer than expected.
“Current prices seem sustainable given the current global tightness in edible oils, with no short-term supply of Black Sea sunflower oil and limited supply of palm products in Southeast Asia,” Cultrera said.
However, the biggest importers China and India are buying hand-to-mouth, as palm has become the costliest among the four major edible oils.
India is expected to import 450,000 to 500,000 tonnes of palm oil per month versus the usual 600,000 to 700,000 tonnes due to high prices, Indian Vegetable Oil Producers’ Association president Sudhakar Desai said in a UOB Kay Hian conference on Thursday.
The Malaysian Palm Oil Board will release official data on March 10.
Source: Brecorder
