05/11/2022 (The Edge Markets), Kuala Lumpur - Malaysia's palm oil inventories at end-October likely swelled to their highest in three and a half years as production improved while imports slumped, a Reuters survey showed on Friday (Nov 4).

Stockpiles were pegged to rise 9.3% from September to 2.53 million tonnes, its largest since April 2019, according to the median estimate of eight traders and analysts polled by Reuters.

Production is seen expanding 3% to 1.82 million tonnes amid the peak harvest season.

It rose for a fifth consecutive month to its highest since September 2020, but is likely to decline in November and December as year-end monsoon rains in the world's second largest producer are expected to disrupt harvesting activities.

Exports rose 4.5% to 1.48 million tonnes, while imports declined 11.2%.

Cargo surveyor Societe Generale de Surveillance reported a stronger rise in exports due to strong shipments to China, said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.

The global outlook for palm oil remains uncertain, with strict pandemic policies in major importer China weighing on demand, while high energy prices and a slowdown in output provide support, leading industry analysts said.

James Fry, chairman of commodities consultancy LMC International, said edible oil demand in the three biggest markets — India, China and the European Union — is very mixed.

India is showing growth while China has shown few signs of overcoming the impact of lockdowns, he said.

Dorab Mistry, director of Indian consumer goods company Godrej International, raised his forecast for Malaysia's benchmark palm oil contract due to higher crude prices and a shrinking ringgit.

Crude palm oil is expected to trade between RM3,500 and RM4,500 per tonne in the period from now until the end of March next year, he said.   

The Malaysian Palm Oil Board (MPOB) is scheduled to release its data on Nov 10.

https://www.theedgemarkets.com/article/malaysias-endoct-palm-oil-stocks-seen-35year-high-rise-output