11/04/2017 (The Malay Mail Oinline) - KUALA LUMPUR, April 11 — Malaysian palm oil output in March rose at a greater rate compared to export demand, possibly hurting any chance for sharp increase in price of the commodity, Nikkei Asian Review reported.

Crude palm oil production surged to 1.46 million tonne last month from 1.26 million tonne in February, or an increase of 16.3 per cent, the Malaysian Palm Oil Board said in a statement yesterday.

In comparison, CIMB Investment Bank’s survey of 24 plantation areas in Malaysia had predicted only 5 per cent increase over the same period.

With inventory at the highest point over a year, palm oil futures are down to a six-month low, extending the loss to over 14 per cent so far this year, while stocks of major plantation suffered.

Analysts quoted by the Japanese business paper said prices are expected to stay at current level as Malaysia’s palm oil output will likely continue to rise in the months ahead due to recovery in tree yields.

“We think production will continue to climb,” David Ng, an analyst at Phillip Futures in Kuala Lumpur, was quoted saying.

“Prices will test RM2,500 a tonne over next couple of months, weighed down by rising production, while demand will be sluggish on rising soybean supplies.” 

Palm oil stockpile has swelled to 1.55 million tonnes at the end of March, a 6.5 per cent growth from 1.46 million tonnes a month earlier, the report said.