Malaysia’s benchmark crude palm oil prices have gained more than 32% so far this year, hitting a record high of RM5,220 a tonne on Oct 21, partly due to weak production caused by a shortage of labour during the pandemic
KUALA LUMPUR: Malaysia’s palm oil stockpile at the end of November likely slipped to a four-month low as a surge in exports outpaced a small rise in production, according to a Reuters survey.
Inventories in the world’s second-largest palm oil producer were seen 3.5% down from the previous month at 1.77 million tonnes, according to the median estimate of 11 planters, traders and analysts polled by Reuters.
Production likely rose 1% from October to 1.74 million tonnes, its highest since September last year, while exports were forecast to expand 11.9% to 1.59 million tonnes.
“Robust exports for November and recent record-high prices may see destination pipelines filled for December and deep negative margins, which may lead to staggered demand,” said Lee Toong Huang, general manager of palm oil producer Kwantas Oil.
Malaysia’s benchmark crude palm oil prices have gained more than 32% so far this year, hitting a record high of RM5,220 a tonne on Oct 21, partly due to weak production caused by a shortage of labour during the pandemic. Concerns over the Omicron coronavirus variant hurting demand and stalling economic recovery globally have weighed on prices in recent days, as the spread of the new strain causes alarm worldwide.
The virus is unlikely to hurt demand and prices in the short term, pending an assessment towards potential lockdowns and infections, said Marcello Cultrera, institutional sales manager and broker at Phillip Futures here. — Reuters
