End-June palm oil stocks forecast at four-month high

The median estimate for inventories from 10 traders and analysts polled by Reuters was 12% higher than the 1.65 million tonnes recorded in June 2022.

PETALING JAYA: Malaysia’s palm oil inventories likely stood at 1.86 million tonnes 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 shows.

The median estimate for inventories from 10 traders and analysts polled by Reuters was 12% higher than the 1.65 million tonnes recorded in June 2022.

Production was forecast to fall 0.8% to 1.51 million tonnes, 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 of 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 tonnes.

Imports were expected to fall by 17%. The impact of El Nino could put upward pressure on prices in July, as there are expectations for reduced crop yields over July-September, said Marcello Cultrera, director at Apricus 8 Pte Ltd. — Reuters