Malaysia’s palm oil inventories at end-July likely jumped to the highest in eight months due to improving production and soaring imports, a media survey showed yesterday.
Stockpiles in the world’s second-largest producer expanded 8.3 per cent from June to 1.79 million tonnes, according to the median estimate of 11 traders and analysts polled by media.
Production also rose to its highest since November, up two per cent to 1.58 million tonnes.
Exports gained 2.2 per cent to 1.22 million tonnes while imports surged 35 per cent to 80,000 tonnes.
The better exports could be due to slower than expected palm oil exports from larger producer Indonesia, despite Jakarta easing restrictions on shipments, regional head of plantations research at CGS-CIMB Research Ivy Ng said in a note.
Co-founder of Singapore-based Palm Oil Analytics Sathia Varqa said exports would soon gather pace in Indonesia.
“Lower cash prices, widening palm discount to its nearest rival bean oil and reduced export tax will offer increasing palm export opportunities to Indonesia, fuelling competition to Malaysia,” Varqa said.
Concerns over demand for Malaysian palm oil as Indonesia cuts taxes and raises exportable volumes to clear its lofty inventories has pushed benchmark crude palm oil prices from record highs to its lowest in a year.
Varqa expects palm oil prices to flux between MYR3,800-MYR4,200 a tonne in August and September.
Source: Borneo Bulletin