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PREVIEW-Malaysia palm oil stocks likely fell three straight months to end-January
calendar06-02-2024 | linkNasdaq | Share This Post:

05/02/2024 (Nasdaq), Jakarta - Malaysia's palm oil stocks likely fell for three straight months to the end of January, in line with seasonal low production in the world's second biggest palm oil producer, a Reuters survey showed on Monday.


Palm oil stocks are seen falling to 2.14 million metric tons, down 6.62% from December, according to the median estimate of ten traders, planters and analysts polled by Reuters. MYPOMS-TPO


Crude palm oil (CPO) output was seen at 1.37 million tons, a 11.83% decline from the previous month, with analysts expecting a significant drop in production between January and March. MYPOMP-CPOTT


"The palm oil market is experiencing a shift in its supply-demand dynamics with a notable decrease in palm oil production between January and March - this currently by 11%-14% - which could contribute to a tighter supply moving forwards," Marcello Cultrera, director at Singapore-based commodities consultancy Apricus 8, said.


Exports are estimated to drop by 8.65% to 1.22 million tons, the survey showed, as demand eased amid tight spread with rival vegetable oils and winter in key destination markets. MYPOME-PO


The market potentially will be tighter in upcoming months as Ramadan subscriptions take place, Cultrera said, referring to Muslim holy month of Ramadan that will occur in March.


"The combination of lower production and lower ending stocks, alongside increased imports, suggests that there might be upward pressure on prices due to the supply constraints," he said.


The Malaysian Palm Oil Board (MPOB) is scheduled to release its monthly data on Feb. 13.


Breakdown of January estimates (in metric tons):

Range                                                   Median

Production                          1,320,000 - 1,410,000                    1,367,351

Exports                                 1,190,000 - 1,290,000                    1,219,007

Imports                                      31,000 - 55,000                         40,000

Closing stocks                    2,048,167 - 2,258,919                    2,139,592


* Official stocks of 2,291,167 tons in December plus the above estimated output and imports yield a total January supply of 3,698,518 tons. Based on the median of exports and closing stocks estimate, Malaysia's domestic consumption in January is estimated to be 339,919 tons.