KUALA LUMPUR: Malaysia's end-July palm oil inventories rose to a five-month peak on higher production, data from the country's palm oil board showed on Thursday, but missed expectations as exports grew at a faster pace.
Stockpiles in the world's second-largest producer gained 0.68% from the month before to 1.73 million metric tons, rising for a third consecutive month, according to the Malaysian Palm Oil Board.
A Reuters survey last week had pegged inventories at 1.79 million tons, rising 4.2% from a month earlier. Crude palm oil output jumped 11.21% to 1.61 million tons, the highest since December, MPOB data showed.
Exports rose 15.55% to 1.35 million tons, more than expected. Production is on a seasonal upward trend, while export demand is likely to recover in August due to the absence of Black Sea sunflower oil supplies, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
Sunflower oil supplies from the Black Sea region have stalled in recent weeks after Russia refused to extend a safe passage grain corridor and attacked agricultural and port infrastructure of Ukraine, one of the world's top grain and sunflower oil exporters.
Bagani said palm oil's hefty discount against competing sunflower oil and soy oil will help it attract more buyers, especially during the Indian festivals in September.
Following is a breakdown of the Malaysian Palm Oil Board figures and Reuters estimates for July (volumes in tonnes):