Malaysia end-May palm oil stocks surge as output swells
12/06/2023 (The Edge Malaysia), Kuala Lumpur - Malaysia's end-May palm oil inventories rose for the first time in four months, after output surged to its highest level so far this year, data from the nation's palm oil board showed on Monday (June 12).
Stockpiles in the world's second-largest producer rose 12.63% from the month before to 1.69 million tonnes, the Malaysian Palm Oil Board (MPOB) said.
Production in May swelled 26.8% from April to 1.52 million tonnes, the highest since December, helped by more harvesting days and as a shortage of labour continue to ease.
Harvesting is in full force possibly due to the return of migrant workers after a pandemic-induced labour shortage, signalling the possibility of good production continuing through the second half of the year, a Kuala Lumpur-based trader said.
Exports from Malaysia, which had been facing increasing competition from larger rival Indonesia, were down 0.78% to 1.08 million tonnes.
The data may weigh on Malaysia's benchmark crude palm oil prices as inventories and supply were higher than expected.
A Reuters survey had pegged May inventories at 1.6 million tonnes. Production was seen at 1.45 million tonnes, and exports at 1.08 million tonnes.
In June, palm oil yields may be hit by increasingly hot and dry weather, as both top producers Malaysia and Indonesia have warned of El Niño arriving during the month.
Early signs of El Niño are threatening food producers across Asia, with palm oil and rice production likely to suffer in Indonesia and Malaysia — which supply 80% of the world's palm oil — and Thailand, according to analysts.