six-month low as overseas demand outpaced sluggish output, a Reuters
poll showed yesterday.
Inventories in the world’s No. 2 producer dropped 10.2 per cent to
1.45 million tonnes, the median survey of five plantation houses
showed.
Production tumbled 14.8 per cent to 1.05 million
tonnes as harvesting activities in key growing regions states were
stalled by floods and heavy rains, which may have resulted in weaker
yields.
Exports fell 5.1 per cent to 1.22 million tonnes,
but outpaced production. China slowed down buying ahead of this
month’s Lunar New Year holidays due to ample stocks and higher prices
of vegetable oils.
January imports of crude palm oil from
Indonesia, the No. 1 producer, rose 13.1 per cent to 120,000 tonnes, as
firms tried to ship out as much as they could before the Jakarta
raised export taxes to 25 per cent from 20 per cent this month.
Traders said output may continue to fall as floods inundated
major planting states of Johor and Sabah, that together make up more
than half of national output.
Although the rains have
slowed and floods are receding, planters are concerned that prolonged
moisture will affect yields.
Overseas demand is expected
to recover after Chinese New Year holiday but may be muted due to the
high prices. Palm oil hit a three-year high yesterday.
Imports from world’s No. 1 palm oil producer may decline after the
Indonesian government imposed higher exports tax in February as prices
continue to rise.
The rally may continue if the rainy
weather gets worse in Malaysia and Indonesia. Also the impact of
weather in Argentina, which exports competing soyaoil, will be closely
watched.
Recent weather forecast showed hot and dry weather
in southern hemisphere that has stressed soyabean output could ease
in recent weeks.
Analysts said the US Department of
Agriculture is expected to report tighter global ending soyabean stocks
in February. – Reuters
