MARKET DEVELOPMENT
UPDATE 1-Malaysia August Palm Stocks Rise to Around 2.5 Mln Tonnes
UPDATE 1-Malaysia August Palm Stocks Rise to Around 2.5 Mln Tonnes
(Adds analyst comment, palm prices)
* August palm stocks up 10 pct m/m to 2.49 mln T
* August CPO production rises 13 pct to 2.05 mln T
* Exports fall 0.3 pct m/m to 1.61 mln T
10/09/2015 (Reuters) - Malaysian palm oil stocks rose 10 percent to 2.49 million tonnes in July, higher than expected due to slowing Indian demand and as flooding last year delayed planting, industry regulator data showed on Thursday.
Malaysian palm oil futures hovered around six-week highs following the release of the figures, boosted by a weaker ringgit and data indicating a slight rise in Malaysian shipments in the first 10 days of September.
Palm's benchmark prices reached 2,129 ringgit ($490.33) a tonne on Thursday at the midday break. It had climbed for three consecutive sessions this week to reach a six-week high of 2,132 ringgit on Wednesday, its strongest level since July 29, and gaining 6 percent so far this month.
Benchmark prices have been rising since Aug. 27 on speculative buying and short-covering, with traders taking a bearish stance ahead of Malaysia's August palm oil inventory data release.
Palm had slid nearly 10 percent prior to the price rise, due to concerns over the growth and consumption slowdown in top buyer China.
The weaker ringgit lends some support to palm prices, reaching a year-to-date high of 4.3750 against the dollar on Thursday as emerging Asia's worst performing currency this year.
Based on data from the Malaysian Palm Oil Board (MPOB), stockpiles in August rose 10.04 percent from a revised 2.27 million tonnes at the end of July, compared with a median forecast of 2.41 million tonnes in a Reuters poll. The five planters, traders and analysts surveyed had predicted a 6.3-percent rise in inventories.
"The rise in output and stockpiles is slightly stronger than the seasonal trend. Flooding late last year put a delay in production from the first to the third quarter of this year," said Ben Santoso, an analyst at DBS Singapore.
"We're expecting numbers in the fourth quarter to normalise."
August exports from the world's second-largest producer fell 0.3 percent to 1.607 million tonnes from 1.612 million tonnes in July on slowing demand from India, the world's largest consumer of palm oil. The poll had earlier forecast a 2 percent rise in exports.
"India has been importing quite steadily in the past months, but it won't need imports until Diwali comes in October," said Santoso, referring to the Hindu festival.
"We will probably see shipments to India coming down a little in August and September before picking up and coming back down again."
Data from cargo surveyor Intertek Testing Services on Thursday showed however that Malaysian palm oil exports increased 3.7 percent over September 1-10 from the same period in August.
Malaysia's palm oil production in August rose 12.96 percent to 2.05 million tonnes. This should see minimal impact on palm prices, as the market has already factored in increasing production numbers, according to a Kuala Lumpur based trader.
($1 = 4.3420 ringgit)
* August palm stocks up 10 pct m/m to 2.49 mln T
* August CPO production rises 13 pct to 2.05 mln T
* Exports fall 0.3 pct m/m to 1.61 mln T
10/09/2015 (Reuters) - Malaysian palm oil stocks rose 10 percent to 2.49 million tonnes in July, higher than expected due to slowing Indian demand and as flooding last year delayed planting, industry regulator data showed on Thursday.
Malaysian palm oil futures hovered around six-week highs following the release of the figures, boosted by a weaker ringgit and data indicating a slight rise in Malaysian shipments in the first 10 days of September.
Palm's benchmark prices reached 2,129 ringgit ($490.33) a tonne on Thursday at the midday break. It had climbed for three consecutive sessions this week to reach a six-week high of 2,132 ringgit on Wednesday, its strongest level since July 29, and gaining 6 percent so far this month.
Benchmark prices have been rising since Aug. 27 on speculative buying and short-covering, with traders taking a bearish stance ahead of Malaysia's August palm oil inventory data release.
Palm had slid nearly 10 percent prior to the price rise, due to concerns over the growth and consumption slowdown in top buyer China.
The weaker ringgit lends some support to palm prices, reaching a year-to-date high of 4.3750 against the dollar on Thursday as emerging Asia's worst performing currency this year.
Based on data from the Malaysian Palm Oil Board (MPOB), stockpiles in August rose 10.04 percent from a revised 2.27 million tonnes at the end of July, compared with a median forecast of 2.41 million tonnes in a Reuters poll. The five planters, traders and analysts surveyed had predicted a 6.3-percent rise in inventories.
"The rise in output and stockpiles is slightly stronger than the seasonal trend. Flooding late last year put a delay in production from the first to the third quarter of this year," said Ben Santoso, an analyst at DBS Singapore.
"We're expecting numbers in the fourth quarter to normalise."
August exports from the world's second-largest producer fell 0.3 percent to 1.607 million tonnes from 1.612 million tonnes in July on slowing demand from India, the world's largest consumer of palm oil. The poll had earlier forecast a 2 percent rise in exports.
"India has been importing quite steadily in the past months, but it won't need imports until Diwali comes in October," said Santoso, referring to the Hindu festival.
"We will probably see shipments to India coming down a little in August and September before picking up and coming back down again."
Data from cargo surveyor Intertek Testing Services on Thursday showed however that Malaysian palm oil exports increased 3.7 percent over September 1-10 from the same period in August.
Malaysia's palm oil production in August rose 12.96 percent to 2.05 million tonnes. This should see minimal impact on palm prices, as the market has already factored in increasing production numbers, according to a Kuala Lumpur based trader.
($1 = 4.3420 ringgit)