Malaysia's palm oil stocks jumped to their highest level in eight months in May as a surge in production and imports countered exports, which rose to their highest in six months, data from the industry regulator showed on Tuesday.
Palm oil stocks rose 6.65% month-on-month in May, the third consecutive monthly increase, to 1.99 million metric tons, the highest since September 2024, the Malaysian Palm Oil Board (MPOB) said.
Crude palm oil production climbed 5.05% in May, also the third straight monthly rise, to 1.77 million tons, while palm oil exports surged 25.6% to 1.39 million tons, the highest since November last year, the MPOB said. Imports rose to 68,971 tons last month from 58,292 tons in April, the data showed.
A Reuters survey had estimated inventories at 2.01 million tons, with output at 1.74 million tons and exports at 1.3 million tons.
The MPOB report is slightly bullish for palm oil, as the market was already trading with the expectation of stocks rising to 2 million tons, said Anilkumar Bagani, research head of Mumbai-based vegetable oil broker Sunvin Group.
"Unless production rises with greater force in (the) coming months, we expect demand, particularly from top buyer India, to support the market."
Earlier this month, India halved the basic import tax on crude palm oil to 10% to bring down food prices and help the local refining industry. Palm oil has been trading at a discount to rival soyoil for the last few weeks and has started to lure buyers during the peak production season, said a Mumbai-based dealer with a global trade house. - Reuters
