Malaysia's end-Dec palm oil stocks seen falling to four-month low
5 Jan 2023 (www.channelnewsasia.com) KUALA LUMPUR : Malaysia's palm oil inventories at end-December likely shrank to the lowest in four months as production and exports slowed, a Reuters survey showed on Thursday.
Stockpiles fell 5.3 per cent from the month before to 2.17 million tonnes, the lowest since August, according to the median estimate of nine traders and analysts polled by Reuters.
Output fell for a second consecutive month as tropical storms and heavy flooding disrupted harvesting and hit supply lines across the world's second-largest producer.
Production declined 3 per cent from November to 1.63 million tonnes, the smallest since July.
Exports also fell 1 per cent to 1.5 million tonnes, with cargo surveyors indicating a slump in shipments to key market China.
Demand from China has declined in recent years due to strict COVID-19 containment measures, but consumption is expected to slowly recover this year as Beijing shifts away from its stringent policies.
However, raging COVID-19 infections in the world's most populous nation have raised doubts of a recovery in the near term.
Meanwhile, Indonesia's move to limit export volumes and increase the use of palm oil as biofuels domestically will tighten global supplies and support prices.
A Kuala Lumpur-based analyst said in January traders will be eyeing Chinese New Year demand and improvements in Malaysia production, the development of South American soybean planting.
The Malaysian Palm Oil Board (MPOB) is scheduled to release its data on January 10.
Breakdown of December estimates (in tonnes):
Range Median
Production 1,800,000-1,512,700 1,630,000
Exports 1,563,300-1,485,000 1,502,554
Imports 0-60,000 50,000
Closing stocks 2,340,000-1,966,700 2,168,000
* Official stocks of 2,288,473 tonnes in November plus the above estimated output and imports yield a total December supply of 3,968,473 tonnes. Based on the median of exports and closing stocks estimate, Malaysia's domestic consumption in December is estimated to be 297,919 tonnes.