The recent release of June data showed palm oil stockpiles slipped 1% to 2.42 million MT for a fourth straight month of declining inventory.
That month, Malaysian crude palm oil (CPO) production fell 9.2% month-on-month (m-o-m) to 1.52 million metric tonnes (MT), partly owing to the Hari Raya festivities as estate workers returned to their hometowns.
The decline in inventory was also partly owing to an increase in palm oil products consumption, the research house said.
Meanwhile, palm oil exports fell fell 19.4% m-o-m in June to 1.38 million MT due to weaker demand from the Top 3 buyers - India, China and the EU.
"The lower palm-oil exports in June19 could partly be due to their earlier stocking-up activities done prior to the Hari Raya celebration, in our view," said Affin Hwang.
Moving forward, the research house expects production to pick up again. "We expect Malaysia’s 2019 CPO production to rebound to c.20m MT from 19.5m MT in 2018," it said.
"We still expect global palm-oil inventories to gradually decline with higher exports and higher consumption of palm-oil products going forward, supported by the energy market and food industries."
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