Palm oil stocks in Malaysia likely edged up for a third straight month in May to touch their highest since the end of January, a Reuters survey showed on Thursday, as a rise in production outstripped export demand for the tropical oil. Stockpiles in Malaysia, the world's second-largest producer, have grown continuously since the beginning of March due to higher crude palm oil output amid poor global demand. A further rise in inventories would add pressure on benchmark palm prices that are already down nearly 10 percent this year.
The median forecast of six traders, planters and analysts pegged Malaysian palm stocks at 1.81 million tonnes at end-May, up 2.4 percent from April and at their highest in four months. May's palm output was seen rising 7.1 percent to 1.67 million tonnes, according to the survey. Exports were forecast at 1.36 million tonnes, up 8.0 percent from April.
Cargo surveyors earlier this week reported that Malaysian palm exports were 8-9 percent higher in May from a month ago. The rise was slower compared to a 23 percent jump recorded for the May 1-15 period as global demand unexpectedly lost momentum in the second half of the month. Palm demand had been expected to surge in April and May, with buyers in India, Pakistan and the Middle East restocking ahead of the holy month of Ramazan, which begins in late June this year and ends with the Eidul-Fitr in July.
Festive seasons typically drive up consumption of palm oil, which is used as cooking oil and as an ingredient in foods ranging from cookies to chocolate to ice cream. The median figures from respondents implied domestic consumption in May of around 298,091 tonnes, much higher than the average range between 150,000 and 180,000 tonnes.
