23/10/2012 (Bernama) - OSK Research views positively the increase in Malaysia's palm oil shipment for the first 20 days of October as it represents significant month-on-month growth in the light of the current pessimism in demand.

Cargo surveyor Societe Generale de Surveillance said shipment to India and China were weaker but this was more than mitigated by the strong shipment to the European Union and other countries.

In a statement today, OSK said should the 16.7 per cent month-on-month growth be sustained for the entire month, Malaysia's shipment could reach 1.757 million tonnes and year to date export would reach 14.214 million tonnes, down 3.5 per cent against from last year.

It also noted that the industry was suffering from "indigestion" due to a surge in production during the peak season and restrictive export duty, resulting in ballooning inventory.

"However, we believe the tax issue will be addressed with Malaysia's new export duty, effective January 2013, and the nationwide roll out of biodiesel," it added.