Palm oil stockpile expected to dip further in February to below 2mil tonnes
14/2/2024 (New Straits Times), Kuala Lumpur - Palm oil stockpile is expected to dip below two million tonnes in February as palm oil production is likely to decline further following a downtrend for the third consecutive month in January.
Hong Leong Investment Bank (HLIB) research said palm oil's stock levels dropped 11.8 per cent month-on-month to 2.02 million tonnes in January, as lower exports were more than offset by lower opening stocks, imports, and production. The stock level came in lower than Bloomberg's survey's estimate of 2.09 million tonnes, as exports beat expectations.
Production fell for the third consecutive month, by 9.6 per cent to 1.4 million tonnes due to the continued seasonally low production season.
Exports also dipped by 0.8 per cent to 1.35 million tonnes last month, as higher exports to EU region and Asia Oceania were offset by lower exports to China, India and Africa.
Intertek Services indicate that Malaysia' palm oil shipment increased marginally, by 1.1 per cent during the first 10 days of February, as lower exports to EU region and India were mitigated by higher exports to Africa, Asia Oceania and Middle East.
"We maintain 2024-25 crude palm oil price assumptions of RM4,000 per tonne and RM3,800 per tonne as we expect El Nino's impact on palm production and prices to kick in around mid-2024," stated HLIB research.
It maintained "Neutral" on the sector given the absence of notable demand catalyst.