Malaysian palm oil inventories rose marginally last month to above 3 million tonnes as exports fell sharply, official data showed on Monday, although industry focus is turning to the prospect of rising sales in March.
February stockpiles rose 1.3 percent from the previous month to 3.05 million tonnes, industry regulator the Malaysian Palm Oil Board (MPOB) said. Palm oil reserves in Malaysia, the world’s second largest producer, have eased after hitting an all-time high of 3.2 million tonnes in December, as lower prices boost demand. “Stocks higher than 3 million tonnes will keep pressure on prices,” said one Kuala Lumpur-based trader. “But the market is likely to focus on exports this month. It will be supportive for prices if exports are close 1.6 million tonnes or so.” Malaysian palm oil futures slipped almost 8 percent in February as rising inventories and declining demand weighed. The market was little changed at 2,124 ringgit a tonne at 0528 GMT. Production in February fell 11.1 percent from the previous month to 1.54 million tonnes, while exports slumped 21.4 percent from January to 1.32 million tonnes, MPOB said. A Reuters survey had forecast palm oil’s end-February stockpiles to fall 1.7 percent to 2.95 million tonnes, while production was forecast to fall 8 percent to 1.6 million tonnes.
Exports were expected to decline 14 percent to 1.44 million tonnes. However, private data is already showing higher demand for the tropical oil this month. Malaysia’s March 1-10 palm oil exports rose 11.4 pct to 453,283 tonnes, from 406,829 tonnes shipped in the first 10 days of last month, according to Amspec Malaysia. Palm oil prices are likely to be supported in 2019 by rising consumption, falling inventories and slowing growth in production of the edible oil, leading industry analysts said last week at a conference in Kuala Lumpur. The following is a breakdown of the Malaysian Palm Oil Board figures and Reuters estimates for February: (volumes in tonnes) Feb 2019 Feb 2019 poll Feb 2018 Jan 2019 Output 1,544,517 1,599,249 1,342,805 1,737,498 Stocks 3,045,493 2,951,500 2,476,453 3,001,169 Exports 1,321,287 1,437,500 1,243,621 1,676,442 Imports 94,278 72,976 67,165 81,084
