Palm oil stocks hit 11-month high

Fitch expects the price of CPO to weaken to around US$750 per tonne in the final quarter of 2023.

KUALA LUMPUR: Palm oil stockpiles hit an 11-month high at the end of September, according to data from the Malaysian Palm Oil Board (MPOB), raising concerns about demand for the commodity.

Inventories rose 9.6% from August to 2.31 million tonnes, the fifth consecutive month of increases at the world’s second-largest palm oil producer.

Crude palm oil output rose 4.33% to 1.83 million tonnes in September, while exports dropped to 1.2 million tonnes, the data showed.

A Reuters survey forecast inventories at 2.38 million tonnes, a 12.05% growth on the month, production at 1.86 million tonnes, and exports at 1.32 million tonnes.

“The stocks rose in line with market expectations. The pace suggests inventories would rise further in Malaysia to 2.5 million tonnes by the end of December,” said a Mumbai-based dealer with a global trading house.

Palm oil is struggling as rival oils are available at competitive prices, according to the dealer. Demand in India and China, the top two consumers of palm oil, is expected to moderate in the coming months as inventories have risen in those countries, another dealer said.

However, domestic demand in Malaysia appeared to be growing.

The MPOB data showed that Malaysian consumption nearly doubled month-on-month to 494,000 tonnes in September, said Anilkumar Bagani, research head at Sunvin Group, a Mumbai-based vegetable oil brokerage. — Reuters