MARKET DEVELOPMENT
PREVIEW-Malaysia's April Palm Stocks Seen at 5-Mth High, Output Climbing
PREVIEW-Malaysia's April Palm Stocks Seen at 5-Mth High, Output Climbing
* April palm stocks seen up 14.3 pct m/m at 2.13 mln tonnes
* Output seen rising 11.5 pct to 1.67 mln tonnes
* Exports seen up 3.3 pct at 1.22 mln tonnes
* Malaysian Palm Oil Board data due May 11 after 0430 GMT
07/05/2015 (Reuters) - Palm oil stocks in Malaysia, the world's second-largest grower, probably rose to a five-month high at the end of April as crude palm output continued to climb and outpaced export demand, a Reuters poll showed on Wednesday.
The growing stockpiles could dent a rally in benchmark palm prices, which have shot up more than 6 percent from the weakest point at the end of April to a peak of 2,200 ringgit ($616.59) a tonne on Wednesday, as the contract tracked big gains in rival soy markets.
The median forecast from six planters, traders and analysts suggested Malaysia's palm inventories rose 14.3 percent from March to 2.13 million tonnes in April, bringing them to their loftiest level since November.
The rise in stockpiles was largely due to another month of bumper yields, analysts and planters said, led by a strong recovery in fruit bunch production in Sabah, Malaysia's largest palm-growing state.
"No doubt, the harvest is fantastic in April as we are just stepping into the rising curve of the high-production season," said Hiro Chai of CIMB Futures in Malaysia.
The poll forecast crude palm oil output in April rose 11.5 percent to 1.67 million tonnes, overtaking export shipments, which were forecast to be 1.22 million tonnes, up just 3.3 percent from March.
In March, output surged 33.3 percent, the biggest rise on record.
"Sabahan planters are catching up now with large bulks of fruit on trucks, after having a very poor harvest last month," Chai added.
"Despite relatively dry weather apparent in Sabah, their palm trees seemed not to have been bothered by localised dry spells and are doing a good job in fruit production recently."
The median figures from the survey imply domestic consumption of 230,035 tonnes in April.
Malaysia's market was also helped on Wednesday by Indonesia approving a regulation that requires exporters to pay a levy of $50 per tonne on crude palm oil and $30 for processed palm oil products, which is expected to be implemented by the third week of May.
The regulation, first announced in late March, is aimed at funding Indonesian biodiesel subsidies as the top producer looks to give a lift to its fledgling biofuel industry.
Bigger consumption of palm locally would also eat into Indonesian's own palm stockpiles, providing support for prices.
Breakdown of April estimates (in tonnes):
Range Median
Production 1,532,200 - 1,733,000 1,667,161
Exports 1,110,000 - 1,252,800 1,220,515
Imports 41,600 - 62,361 50,000
Closing stocks 1,927,900 - 2,240,000 2,132,322
($1 = 3.5680 ringgit)
* Output seen rising 11.5 pct to 1.67 mln tonnes
* Exports seen up 3.3 pct at 1.22 mln tonnes
* Malaysian Palm Oil Board data due May 11 after 0430 GMT
07/05/2015 (Reuters) - Palm oil stocks in Malaysia, the world's second-largest grower, probably rose to a five-month high at the end of April as crude palm output continued to climb and outpaced export demand, a Reuters poll showed on Wednesday.
The growing stockpiles could dent a rally in benchmark palm prices, which have shot up more than 6 percent from the weakest point at the end of April to a peak of 2,200 ringgit ($616.59) a tonne on Wednesday, as the contract tracked big gains in rival soy markets.
The median forecast from six planters, traders and analysts suggested Malaysia's palm inventories rose 14.3 percent from March to 2.13 million tonnes in April, bringing them to their loftiest level since November.
The rise in stockpiles was largely due to another month of bumper yields, analysts and planters said, led by a strong recovery in fruit bunch production in Sabah, Malaysia's largest palm-growing state.
"No doubt, the harvest is fantastic in April as we are just stepping into the rising curve of the high-production season," said Hiro Chai of CIMB Futures in Malaysia.
The poll forecast crude palm oil output in April rose 11.5 percent to 1.67 million tonnes, overtaking export shipments, which were forecast to be 1.22 million tonnes, up just 3.3 percent from March.
In March, output surged 33.3 percent, the biggest rise on record.
"Sabahan planters are catching up now with large bulks of fruit on trucks, after having a very poor harvest last month," Chai added.
"Despite relatively dry weather apparent in Sabah, their palm trees seemed not to have been bothered by localised dry spells and are doing a good job in fruit production recently."
The median figures from the survey imply domestic consumption of 230,035 tonnes in April.
Malaysia's market was also helped on Wednesday by Indonesia approving a regulation that requires exporters to pay a levy of $50 per tonne on crude palm oil and $30 for processed palm oil products, which is expected to be implemented by the third week of May.
The regulation, first announced in late March, is aimed at funding Indonesian biodiesel subsidies as the top producer looks to give a lift to its fledgling biofuel industry.
Bigger consumption of palm locally would also eat into Indonesian's own palm stockpiles, providing support for prices.
Breakdown of April estimates (in tonnes):
Range Median
Production 1,532,200 - 1,733,000 1,667,161
Exports 1,110,000 - 1,252,800 1,220,515
Imports 41,600 - 62,361 50,000
Closing stocks 1,927,900 - 2,240,000 2,132,322
($1 = 3.5680 ringgit)