Malaysian palm oil reserves seen at six-year high as exports slump — survey

(Dec 3): Palm oil stockpiles in Malaysia surged to the highest in more than six years as exports dropped in November, according to a survey.

Inventories jumped 10% from a month earlier to 2.71 million tonnes, the median of 11 estimates in a poll of plantation executives, traders and analysts. That’s the highest level since April 2019 and an increase of 47% from a year ago.

Palm oil reserves have been expanding since March and high stockpiles could pressure prices of the tropical oil. Futures briefly dropped below RM4,000 a tonne in November, as demand from top importer India eased with the end of the festival season.

Exports dropped about 15% to 1.43 million tonnes, after jumping almost 19% a month earlier. The Malaysian Palm Oil Board (MPOB) will publish its monthly data on Dec 10.

Crude palm oil production in Malaysia, the world’s second-largest grower, eased 2.9% to 1.98 million tonnes, after jumping 11% in October, according to the survey.

“Peak production months are over and we are entering into the lower production months, but demand has been rather lethargic,” said Paramalingam Supramaniam, a director at brokerage Pelindung Bestari Sdn Bhd.

See also: US moves to deepen minerals supply chain in AI race with China

Market participants are looking for confirmation on the size of Malaysian stockpiles, and anything above 2.6 million tonnes would be considered bearish, Paramalingam said.

More from the survey:

• Stockpile were estimated between 2.65 million and 2.78 million tonnes, while production was seen between 1.86 million and 2.13 million tonnes.
• Export forecasts were between 1.30 million tonnes and 1.52 million tonnes.
• Imports were seen at 40,000 tonnes, compared with 36,283 tonnes in October.
• Local consumption was between 270,000 tonnes and 490,000 tonnes.

See also: Australia raises wheat crop outlook to third-largest on record

NOTE: November numbers, in million tonnes, are based on the median of 11 estimates.

Uploaded by Liza Shireen Koshy