MALAYSIA’S palm oil stocks dropped to an eighth-month low in May as
foreign and local demand outpaced a recovery in production, data from
an industry regulator showed yesterday.
The Malaysian Palm
Oil Board said stocks in the world’s No.2 palm oil producer fell 3.71
per cent to 1.56 million tonnes, lower than market expectations for a
0.6 per cent drop.
“This is friendly number. Production
growth has yet to translate into a stock rise because exports and local
consumption are still robust,” said a trader with a foreign
commodities brokerage, adding that the market could add another RM10
when it reopens.
The benchmark August contract on the Bursa
Malaysia Derivatives Exchange edged RM1 higher to RM2,419 a tonne by
the midday break and ahead of the data release.
Production rose 6.06 per cent to 1.31 million tonnes, in line with
market forecasts, as yields started improving in the key palm oil
growing state of Sabah on Borneo island after months of El Nino-driven
hot weather that slowed output.
Exports gained 5.96 per cent
to 1.29 million tonnes in May as top buyers like China and India did
some restocking.
The momentum may continue in June with cargo
surveyor Intertek Testing Services reporting a 22.7 per cent increase
for June 1-10 from a year ago as China stepped up buying.
Based on trader calculations on Malaysian Palm Oil data, domestic
consumption in May stood close to 170,000 tonnes as some palm oil was
channeled into the government’s biodiesel blending programme.
According
to the MPOB, exports of palm kernel cake increased 24.32 per cent to
182,618 tonnes, oleochemical rose 1.04 per cent to 179,701 tonnes while
biodiesel dropped 43.36 per cent to 9,668 tonnes.
CPO imports in
May rose 5.02 per cent to 110,621 tonnes while processed palm oil
imports declined 26.33 per cent to 3,776 tonnes. – Reuters, Bernama
Source : Business Times
