Malaysia’s palm oil stocks surge as output jumps despite weak exports
10/05/2024 (Free Malaysia Today), Kuala Lumpur - Malaysia’s palm oil stocks increased at the end of April for the first time in six months as production jumped despite a drop in exports, the industry regulator said on Friday.
The rise in stocks in Malaysia, the world’s second-largest palm oil producer after Indonesia, would put pressure on benchmark futures, which are trading near their lowest level in three months.
Palm oil stocks at the end of April rose 1.85% from the previous month to 1.74 million metric tonnes, the first month-on-month rise since October, data from the Malaysian Palm Oil Board (MPOB) showed.
Crude palm oil production gained 7.86% from March to 1.50 million tonnes, while palm oil exports fell 6.97% to 1.23 million tonnes, the MPOB said.
A Reuters survey forecast April inventories at 1.68 million tonnes, a 2% decline from the previous month, with output at 1.46 million tonnes and exports at 1.22 million tonnes.
The growth in production was more than expected and that led to higher stocks, said a New Delhi-based dealer with a global trade house.
“Exports need to pick up in the coming months as production is expected to rise further,” the dealer said.
Palm oil has now been trading at a discount to rivals soy oil and sunflower oil, which will help it regain market share in key consuming countries such as China and India, said Anilkumar Bagani, research head of vegetable oils broker Sunvin Group.