Malaysia palm oil stocks likely to drop to 8-month low in March

Malaysia’s palm oil inventories are expected to have dwindled to the lowest in eight months at the end of March despite increased output as exports rose.

Palm oil stocks are seen declining for a fifth consecutive month to 1.79 million metric tons, a 6.65% month-on-month drop, according to the median estimate of 10 traders.

Meanwhile, shipments are likely to have surged 21.22% to 1.23 million tons in March, driven by demand for Islamic holy month of Ramadan that started in mid-March. MYPOME-PO

“We are seeing an increase in exports in March and we expect the same momentum to continue in April and May,” Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari, said.

In March, crude palm oil (CPO) output in the world’s second biggest palm oil producer was seen rising by 9.76% on a monthly basis to 1.38 million tons, the first increase since November. MYPOMP-CPOTT

“El Nino weather forecast is expected to peak in May, paving the way for a flattish end stocks probably in July, August, September period,” Supramaniam said.

The Malaysian Palm Oil Board (MPOB) is scheduled to release its monthly palm oil data on April 15.

Tags: inventories, exports, Malaysia, palm oil, stocks, shipments, output