Malaysia end-April palm oil stocks hit 5-month high on output rise
Malaysia’s end-April palm oil inventories rose to a five-month high, beating market estimates as production grew for a second consecutive month, official data showed on Monday.
Stockpile increased 7.1% from the previous month to 1.55 million tonnes, its highest since November, according to data from industry regulator the Malaysian Palm Oil Board (MPOB).
Output in the world’s second-largest palm oil producer jumped 7% to 1.52 million tonnes, hitting a six-month high.
Production rose at a slightly lower pace but maintained the momentum seen in March fuelled by strong activity in the top producing state of Sabah as good weather aided yields, said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.
Exports climbed for a second straight month, rising 12.6% to 1.34 tonnes – their highest since December.
“Exports rose higher than expected but domestic consumption fell below 200,000 tonnes for the first time in 12 months, resulting in higher stocks for the second successive month,” Varqa said.
The data is slightly bearish for market sentiment but cargo surveyors’ estimates of stronger May 1-10 exports may provide some support, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
Exports during May 1-10 rose 36.8% month-on-month to 469,875 tonnes, said AmSpec Agri Malaysia.
“Due to the rise in inventories and recovery in production cycle, we see palm oil prices to correct lower from Friday’s high of 4,434 ringgit,” he said.
Source: Reuters (Reporting by Mei Mei Chu; Editing by Kim Coghill and Subhranshu Sahu)