KUALA LUMPUR: Malaysia’s palm oil stocks at the end of March dropped to their lowest in 10 months as a jump in exports offset a rebound in production, the industry regulator says.
The reduction in stocks in Malaysia, the world’s second-largest palm oil producer after Indonesia, would help in supporting benchmark futures, which rose to a one-year high earlier this month.
Malaysia’s palm oil stocks at the end of March fell 10.68% from the previous month to 1.71 million tonnes, their lowest since May, data from the Malaysian Palm Oil Board (MPOB) showed.
Crude palm oil (CPO) production gained 10.57% from February to 1.39 million tonnes, while palm oil exports ticked up 28.61% to 1.32 million tonnes, the MPOB said.
A Reuters survey forecast March inventories at 1.79 million tonnes, a 6.65% decline from the previous month, with output at 1.38 million tonnes and exports at 1.23 million tonnes.
The MPOB report is bullish for the market, Anilkumar Bagani, research head of vegetable oils broker Sunvin Group said.
“The CPO stocks are depleting fast and they could fall further by end of April.
“Malaysia’s output could drop in the first half of April because of Ramadan holidays, while exports during the period were higher than last month,” he said.
The CPO stocks at the end of March fell to 797,974 tonnes, the lowest since March 2022, the MPOB data showed.
As soybean oil exports from South America are set to increase in the coming months, palm oil exports could come under pressure, a New Delhi-based trader said.
This is because soybean oil is trading at a discount to palm oil, which will cap palm oil prices despite falling stocks, the trader said.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market. — Reuters
