KUALA LUMPUR: Malaysia's palm oil inventories likely stood at 1.86 million metric tons by the end of June, rising by about 10.5% higher from a month earlier to stand at a four-month high amid sluggish exports, a Reuters survey showed on Tuesday.
The median estimate for inventories from 10 traders and analysts polled by Reuters was 12% higher than the 1.65 million metric tons recorded in June 2022.
Production was forecast to fall 0.8% to 1.51 million tons, with growing concerns over the impact of El Nino-induced hot and dry weather during coming months.
However, output in the world's second largest producer may improve in the months ahead as estates transition towards the peak crop season around September, Nagaraj Meda, Managing Director, TransGraph Consulting, said.
Exports in June will likely remain little changed for a second month, with expectations centring on a gain of 0.7% to 1.09 million tons.
Imports were expected to fall by 17%.
The impact of El Nino weather conditions could put upward pressure on prices in July, as there are some expectations for reduced crop yields over July-September, particularly in top producer Indonesia, said Marcello Cultrera, director at Singapore-based commodities consultancy Apricus 8 Pte Ltd.
The Malaysian Palm Oil Board (MPOB) is scheduled to release its data on July 10. - Reuters
