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Current Position:Home » News » Condiments & Ingredients » Oil & Fats » Topic

Malaysia Feb Palm Oil Stockpiles Seen at 4-Month Low

Zoom in font  Zoom out font Published: 2019-03-08  Origin: Reuters  Views: 8
Core Tip: Malaysia’s palm oil stockpiles at end-February are expected to show a 1.7 percent drop from the previous month’s 3 million tonne level.
Malaysia’s palm oil stockpiles at end-February are expected to show a 1.7 percent drop from the previous month’s 3 million tonne level, according to a Reuters survey, in keeping with a typical seasonal decline in production.

Inventories in Malaysia, the world’s second-largest producer of the edible oil, are expected to have slipped to 2.95 million tonnes, based on the median estimate of eight planters, traders and analysts polled by Reuters.

Falling stockpiles will support benchmark palm oil prices , which fell to their lowest in three years last November. Palm futures were last down 0.2 percent at 2,157 ringgit ($527.77) a tonne on Wednesday evening.

A drop in February would be the second consecutive month of inventory declines, taking stockpiles to their lowest levels in four months. MYPOMS-TPO

Meanwhile, February production is expected to have fallen, in line with seasonal trends for a fourth straight month to 1.6 million tonnes, down 8 percent. “Estates in Sarawak posted the sharpest production declines, followed by Sabah and Peninsular Malaysia,” said Ivy Ng, regional head of plantations research at CIMB Investment Bank.

But while last month’s output would be the lowest since July, it would still be the highest February level for Malaysia in Refinitiv Eikon records going back to January 2000. MYPOMP-CPOTT

Looking ahead, Malaysia and leading producer Indonesia will likely see increased output boosted by crop-friendly weather over the last few months, underlining prospects for record production in 2019. But reduced usage of fertiliser, labour shortages and older trees in Malaysia could yet limit growth output, traders and industry players said.

As for exports, the poll also showed industry players and watchers see Malaysia’s February palm oil shipments dropping 14 percent from the month before to 1.44 million tonnes. That would mean the sharpest monthly decline in exports in nine months. MYPOME-PO

The Malaysian ringgit strengthened 0.7 percent against the dollar in February, making the edible oil more expensive for foreign buyers.

Official palm oil data will be published by the Malaysian Palm Oil Board ‪after 0430 GMT on March 11.

The median results from the Reuters survey put Malaysia’s consumption in February at 284,394 tonnes.

Breakdown of February estimates (in tonnes):
Range                               Median
Production            1,500,000 – 1,737,000               1,599,249
Exports                  1,380,000 – 1,508,798               1,437,500
Imports                       50,000 – 110,000                        72,976
Closing Stocks     2,850,869 – 3,098,000              2,951,500

* Official stocks of 3,001,169 tonnes in January plus the above estimated output and imports give a total February supply of 4,673,394 tonnes. Based on the median of exports and closing stocks estimate, Malaysia’s domestic consumption in February is estimated to be 284,394 tonnes.

($1 = 4.0870 ringgit)
 
keywords: palm oil
 
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