MARKET DEVELOPMENT
PREVIEW-Malaysia's July Palm Stocks Seen up Slightly on High Output, Weak Exports
PREVIEW-Malaysia's July Palm Stocks Seen up Slightly on High Output, Weak Exports
* Malaysia's July palm oil stocks seen at 2.19 million tonnes
* Output seen up 1 percent, exports seen down 6.9 pct m/m
* Malaysian Palm Oil Board data due Aug 10 after 0430 GMT
06/08/2015 (Reuters) - Malaysian palm oil stocks likely rose in July as output picked up, while lower demand for exports after the end of the Muslim holy month of Ramadan also added to inventory levels, a Reuters poll showed on Wednesday.
A pick up in Malaysian inventories for a fourth month out of five could drag on benchmark palm prices, which hit an 11-month low of 2,026 ringgit ($524) a tonne on Tuesday given an uncertain demand outlook and concerns about the economic health of top buyer China.
July palm oil stocks in the world's No.2 oil palm producer after Indonesia are forecast to rise 1.6 percent from a month ago to 2.19 million tonnes, according to a median survey of six planters, traders and analysts.
Malaysian stocks are not expected to see any significant short-term change as higher output will offset the benefit from any drop in Indonesian supply stemming from an export levy there, said Voon Yee Ping, an analyst at Kenanga Research.
"While we expect the levy to help boost Malaysian crude palm oil (CPO) exports, we expect minimal near-term inventory impact ... due to rising production," she said.
The survey estimates for July exports were split, with three participants predicting a drop and the other three a rise.
The median indicates exports at 1.58 million tonnes, down 6.9 percent from June, as the end of Ramadan curbed demand. Ramadan, which stretched across June and July this year, is marked by communal fasting and feasting and typically drives up demand for edible oils across Asia.
"We think there will be declining exports, we believe Indonesian players are willing to compete in terms of prices due to their lower cost structure," said an analyst at a local research house. "The Indonesian export tax will have minimal impact, as players are willing to absorb the impact, if any."
Indonesia began collecting a $50 levy on CPO exports in July. It has also issued a regulation that changes the way CPO export taxes are calculated to help offset the costs exporters must pay alongside the new levy.
The survey forecast Malaysian output at 1.78 million tonnes for July, up 1 percent from June. Analysts expect flat production until August before output peaks in October.
Breakdown of July estimates (in tonnes):
Range Median
Production 1,710,000 - 1,980,009 1,781,567
Exports 1,476,613 - 1,832,307 1,580,000
Imports 80,000 - 103,496 89,900
Closing stocks 2,034,365 - 2,274,640 2,186,150
($1 = 3.8690 ringgit)
* Output seen up 1 percent, exports seen down 6.9 pct m/m
* Malaysian Palm Oil Board data due Aug 10 after 0430 GMT
06/08/2015 (Reuters) - Malaysian palm oil stocks likely rose in July as output picked up, while lower demand for exports after the end of the Muslim holy month of Ramadan also added to inventory levels, a Reuters poll showed on Wednesday.
A pick up in Malaysian inventories for a fourth month out of five could drag on benchmark palm prices, which hit an 11-month low of 2,026 ringgit ($524) a tonne on Tuesday given an uncertain demand outlook and concerns about the economic health of top buyer China.
July palm oil stocks in the world's No.2 oil palm producer after Indonesia are forecast to rise 1.6 percent from a month ago to 2.19 million tonnes, according to a median survey of six planters, traders and analysts.
Malaysian stocks are not expected to see any significant short-term change as higher output will offset the benefit from any drop in Indonesian supply stemming from an export levy there, said Voon Yee Ping, an analyst at Kenanga Research.
"While we expect the levy to help boost Malaysian crude palm oil (CPO) exports, we expect minimal near-term inventory impact ... due to rising production," she said.
The survey estimates for July exports were split, with three participants predicting a drop and the other three a rise.
The median indicates exports at 1.58 million tonnes, down 6.9 percent from June, as the end of Ramadan curbed demand. Ramadan, which stretched across June and July this year, is marked by communal fasting and feasting and typically drives up demand for edible oils across Asia.
"We think there will be declining exports, we believe Indonesian players are willing to compete in terms of prices due to their lower cost structure," said an analyst at a local research house. "The Indonesian export tax will have minimal impact, as players are willing to absorb the impact, if any."
Indonesia began collecting a $50 levy on CPO exports in July. It has also issued a regulation that changes the way CPO export taxes are calculated to help offset the costs exporters must pay alongside the new levy.
The survey forecast Malaysian output at 1.78 million tonnes for July, up 1 percent from June. Analysts expect flat production until August before output peaks in October.
Breakdown of July estimates (in tonnes):
Range Median
Production 1,710,000 - 1,980,009 1,781,567
Exports 1,476,613 - 1,832,307 1,580,000
Imports 80,000 - 103,496 89,900
Closing stocks 2,034,365 - 2,274,640 2,186,150
($1 = 3.8690 ringgit)