KUALA LUMPUR: Palm oil stockpiles in Malaysia probably hit the highest level since February as exports from the world’s second-largest grower slumped.
Reserves climbed 4% from a month earlier to 1.82 million tonnes in June, a third month of gains, according to the median of 13 estimates in a Bloomberg survey of plantation executives, traders and analysts.
Exports shrank about 10% to 1.24 million tonnes, according to the survey, the biggest decline since February.
Crude palm oil or CPO production fell almost 6% to 1.6 million tonnes, after surging more than 13% in May.
“Exports were bad in June due to shipping problems, such as space constraints in containers,” said Paramalingam Supramaniam, director at Selangor-based broker Pelindung Bestari.
“Production, on the other hand, was lower due to ageing trees and poor yields, as well as volatile weather that complicated harvesting.”
Malaysia’s overseas palm oil sales may be better in July as shipping problems are expected to ease, Paramalingam said.
Benchmark palm oil futures in Kuala Lumpur reversed earlier gains to close 0.4% lower at RM4,067 a tonne yesterday.
The tropical oil recently posted its longest run of gains since January, fuelled by production concerns and a weaker Malaysian currency that made the world’s most-consumed cooking oil cheaper for overseas buyers.
The Malaysian Palm Oil Board will release official monthly data on July 10.
The survey found stockpile estimates ranged between 1.71 million and 1.92 million tonnes, while production was seen between 1.57 million and 1.77 million tonnes
Export forecasts were between 1.15 million and 1.40 million tonnes, while imports are seen climbing to around 30,000 tonnes from 20,761 tonnes in May.
Local consumption is likely to be in the band of 250,000 and 380,000 tonnes. — Bloomberg
