Preview-Malaysia Palm Oil Stockpiles Forecast To Rise 2.8% In October

November 6th, 2019


Category: Oilseeds

 * Oct stocks seen rising 2.8% to 2.52 mln T - survey
    * Output seen 2% higher at 1.88 mln T - survey
    * Exports seen up 13.1% to 1.59 mln T - survey
    * Malaysian Palm Oil Board data due Nov. 11 

    By Fathin Ungku
    BANGKOK, Nov 6 (Reuters) - Malaysian palm oil stockpiles
likely rose in October as production increased to its highest in
a year, even as export demand surged for the edible oil, a
Reuters survey showed.
    Inventories during October in the world's second-largest
palm oil producer are forecast to rise 2.8% from September to a
seven-month high of 2.52 million tonnes, according to a median
estimate of seven planters, traders and analysts polled by
    Stockpiles were largely expected to rise even as exports
jumped 13.1% to 1.59 million tonnes due to higher demand from
China because of a seasonal climb in output. MYPOME-PO
    "The strong month-on-month exports were boosted mainly by a
48% month-on-month rise in exports to China, which more than
offset the 37% month drop in exports to India," said Ivy Ng,
regional head of plantations research at CIMB Investment Bank
said in a research note to clients. 
    "The strong demand from China could be due to buying ahead
of CNY festivities and lower domestic soybean oil supplies," Ng
    Palm oil exports to India, the world's biggest edible oils
exporter, fell in October due to a boycott of Malaysian palm oil
by Indian buyers over critical comments by the Malaysian Prime
Minister on India's actions in Kashmir. 
    But the consumption outlook of the edible oil is still
bullish because of a push to use more palm oil in biofuels by
Malaysia and Indonesia. 
    Malaysia said last month that implementation of biofuels
mandates in Malaysia and Indonesia will increase consumption of
palm oil up to 1.3 million tonnes and 10 million tonnes per
year, respectively.
    Malaysian palm oil output likely rose in line with seasonal
trends, contributing to the gain in inventories and marking a
fourth straight month of production gains. 
    The poll pegged October production at 1.88 million tonnes,
up 2% from the previous month and the highest in a year.
    Official palm oil data will be published by the Malaysian
Palm Oil Board ‪after 0430 GMT on Nov. 11. 
    Breakdown of September estimates (in tonnes): 
                         Range              Median
 Production      1,700,000 - 1,918,000     1,879,282
 Exports         1,340,000 - 1,610,000     1,594,000
 Imports            48,000 - 120,000        52,000
 Closing Stocks   2,450,000- 2,780,000     2,516,000

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