Malaysia end-Oct palm oil stocks fall as output dips, exports jump


KUALA LUMPUR — Palm oil inventories in

Malaysia, the world’s second-largest producer of the edible oil,

resumed their downward path in October as output fell and the

pace of exports quickened, pushing palm prices to a 22-month

high.

October inventories dipped 4.1% to 2.3 million tonnes, their

second lowest level this year after August’s 2.25 million

tonnes, according to data on Monday from the Malaysian Palm Oil

Board (MPOB).

The fall in stocks buoyed benchmark palm oil prices

, which were up 33 ringgit, or 1.3%, at 2,606 ringgit

($629.77) per tonne at the end of Monday’s morning session. The

benchmark price hit 2,615 ringgit a tonne earlier in the day,

its highest since January 2018.

Exports grew 16.4% to 1.6 million tonnes, rebounding from an

18.8% contraction in September.

“There’s been a great deal of exports that moved into China,

which has been seeing lower soyoil production so palm is the

natural substitute,” said a Kuala Lumpur-based trader. “They’re

also buying ahead of Chinese New Year.”

Malaysia’s output dipped to 1.80 million tonnes in October,

missing analyst forecasts and down about 8 percent from a year

earlier. The fall was tied to persistent dry weather and recent

haze, which cut productivity, said Anilkumar Bagani, research

head of Sunvin Group, a Mumbai-based vegetable oil broker.

“The data is positive for palm oil prices as the production

and stocks are down and Nov 1-10 palm oil export shows promising

numbers.”

The MPOB in September revised Malaysia’s 2019 annual output

slightly lower to 20 million tonnes from its initial forecast of

20.3 million tonnes, and said it expected inventories to fall to

2 million tonnes by December.

A Reuters survey had forecast palm oil stockpiles at the end

of October to rise 2.8% to a seven-month high of 2.52 million

tonnes. Production was seen gaining 2% to 1.88 million tonnes,

and exports were seen up 13.1%, at 1.59 million tonnes.

The following is a breakdown of the Malaysian Palm Oil Board

figures and Reuters estimates for October (volumes in tonnes):

Oct 2019 Oct 2019 poll Sept 2019 Oct 2018

Output 1,795,880 1,879,282 1,842,433 1,964,954

Stocks 2,348,066 2,516,000 2,448,272 2,722,391

Exports 1,641,743 1,594,000 1,409,945 1,571,169

Imports 85,034 52,000 71,112 117,269

*indicates revised figures by the Malaysian Palm Oil Board

($1 = 4.1380 ringgit)

(Reporting by Joseph Sipalan in Kuala Lumpur and Fathin Ungku

in Singapore; Editing by Richard Pullin)

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