PETALING JAYA: Malaysia’s palm oil inventory fell to a 14-month low in April at 1.8 million tonnes, but crude palm oil (CPO) production rose to 1.3 million tonnes from a month earlier, said the Malaysian Palm Oil Board (MPOB). Most analysts said the MPOB’s latest palm oil statistics released yesterday was within the industry concensus. MPOB said palm oil stocks eased 4.5% in April from 1.89 million tonnes a month earlier while production was up 6.7% compared with 1.22 million tonnes previously. Palm oil exports dropped 12.8% to 1.16 million tonnes from from 1.34 million tonnes a month ago. Analysts said the weaker export figures for the month under review could be due to the spike in exports in March ahead of the imposition of the 5% palm oil export tax, which took effect last month. CIMB Research in its palm oil stocks preview for April 2016 expected that CPO prices to trade in the RM2,500-RM2,900 per tonne range this month. As at 5.30pm yesterday, the benchmark CPO futures for July contract eased by RM9 to RM2,653per tonne partly due to the weaker ringgit against the US dollar and uncertain export market outlook. On April 5, CPO rose to a high of RM2,716 per tonne due to concerns over weaker-than-expected palm oil supplies and smaller-than-expected soybean crops from Argentina as farmers were hit with the worst flood situation in the soybean belt in over 30 years. This led to harvest delays and a downgrade in soybean crop estimates for Argentina, which produces 16% of the global soybean output. CIMB Research noted: “Palm oil supplies are expected to get tighter due to weaker-than-expected supply, while demand picks up ahead of Ramadan.” The research unit which has a “neutral” rating on the plantation sector said the sector was fairly valued and that the first quarter earnings of plantation companies would likely to be weaker year-on-year. A recent survey of 26 Malaysian planters by the CIMB Futures team revealed that Sabah estates posted the biggest increase in output of around 13% month-on-month (m-o-m), followed by Sarawak, which registered a 7% m-o-m rise in output, and Peninsular Malaysia, with a 4% m-o-m rise in output. As for the El Nino weather phenomenon, the Bureau of Meteorology Australia (BOM) revealed that the 2015-2016 El Nino was in its last stages. Six of the eight international climate models suggest that the tropical Pacific Ocean will return to neutral levels within the next month. BOM also revealed that the likelihood of La Nina forming later this year was around 50%. Source: The Star