11/08/2011 (The Star) - Crude palm oil (CPO) prices rebounded to close slightly higher yesterday following lower production and declining inventory for July that was reported by the Malaysian Palm Oil Board (MPOB).

The all CPO futures contract closed in positive territory yesterday with the third-month benchmark CPO futures contract for October rising RM17 to settle at RM2,937 per tonne.

MPOB, in releasing its July statistics, said palm oil exports rose to 1.73 million tonnes from 1.58 million tonnes a month earlier.

The higher exports also saw inventory in July declining to 1.99 million tonnes from 2.05 million tonnes in June, which was previously at an 18-month high. For the month under review, production dropped to 1.751 million tonnes from 1.753 million tonnes a month ago.

An analyst with a local brokerage said the lower inventory level for July was unexpected. “This is due to the higher exports in July. This is on stronger demand from major consuming nations like China and India, which were seen stockpiling for the fasting month of Ramadan and the upcoming Hari Raya celebration,” he added.

Meanwhile, Bloomberg reported that Malaysia's palm oil exports surged 53% in the first 10 days of August compared with the previous month.

It quoted independent cargo surveyor, Societe Generale de Surveillance, which estimated that 608,236 tonnes of palm oil were tracked from Aug 1 to Aug 10.