Palm oil stocks hit 3-month high in May despite export boost
10/06/2024 (Free Malaysia Today), Petaling Jaya -Malaysia’s palm oil stocks rose marginally to a three-month high in May, as strong exports were offset by a rebound in production, said the Malaysian Palm Oil Board (MPOB).
The industry regulator said Malaysia’s palm oil stocks rose 0.5% from the previous month to 1.75 million metric tons, the highest since February.
The data from the world’s second-largest palm oil producer, after Indonesia, could potentially weigh on benchmark futures.
Prices were down about 0.6% by the midday trading break.
Crude palm oil production gained 13.48% from April to 1.7 million tons, the biggest in six months.
“Palm oil exports also rose to a six-month high of 1.38 million tons, up 11.66% from April,” MPOB said.
A Reuters survey had forecast May inventories to be at 1.75 million tons, with output of 1.65 million tons and exports at 1.41 million tons.
“The production growth has far exceeded industry expectations,” said a New Delhi-based dealer with a global trade house.
The dealer added that if this trend continues in the coming months, prices could come under pressure, especially if exports don’t rise above 1.5 million tons, which looks difficult.
Meanwhile, Sunvin Group research head of vegetable oils broker Anilkumar Bagani said the MPOB report is neutral for the market.
“Palm oil’s discount to rival soybean and sunflower oil makes it attractive to price-sensitive buyers such as India,” he said.