* Exports climbed 3 percent in March as Malaysia tax eyed

10/04/2015  (Reuters) - Indonesian crude palm oil (CPO) output in March likely rose 17 percent to its highest level since September, a survey of leading industry officials showed, with the increase partly due to more number of available working days on plantations.

A rise in supply from the world's No.1 producer would weigh on benchmark palm prices that are currently trading at three-week lows of 2,137 ringgit ($589) per tonne.

Indonesia produced 2.397 million tonnes of CPO in March, the median estimate in a Reuters survey of three Indonesian industry officials and plantation companies showed, versus 2.049 million tonnes in February.
 
"The most logical answer is that there are more working days in March compared to February," said a palm analyst who did not want to be identified because he was not authorised to speak to the media. "Production is always smallest in February and then it starts to rebound."

In addition to February having fewer days, the Lunar New Year holiday period was also likely to have cut into production, he added.

On Tuesday, a median forecast showed CPO production in Malaysia, No.2 producer, probably rose 17.7 percent to 1.32 million tonnes in March.

Indonesia and Malaysia have now largely exited their monsoon season, when flooding can delay harvesting and hinder the transport of fruit to mills, and Southeast Asian production is forecast to rise in the coming weeks.

Rising palm supplies, coming at a time when the market is bracing itself for record harvests of rival oilseeds, will dent prices which suffered its worst monthly showing in March since August last year.

The median estimate for Indonesian CPO exports in March was 1.8 million tonnes, versus 1.750 million in February.

The small gain was likely a result of palm buyers switching to Malaysian suppliers before the country raised export duties to 4.5 percent in April, the analyst added.

The survey pegged Indonesian palm stocks at 2.667 million tonnes for March, compared with 2.425 million in February.

Domestic consumption was seen at around 500,000 tonnes.

Indonesian inventories may ease in April, the analysts said, as Southeast Asia's biggest economy looks to fund recently announced biodiesel mandates by imposing palm export levies.

Below is a table of median Reuters CPO survey results for 2014/2015 (forecasts in million tonnes).

The survey includes contributions from the Indonesian Palm Oil Board, the Indonesian Vegetable Oil Industry Association and PT Sinar Mas Agro Resources & Technology, one of the largest listed palm companies.