KUALA LUMPUR: Palm oil stocks likely fell to a six-month low by end-April, according to a Reuters survey, recording a second straight month of declines as a slight gain in exports outpaced a dip in production.
Stockpiles in the country, the world’s second-largest palm oil producer and exporter, likely lost 5% from March to 2.77 million tonnes in April, according to the median estimate of eight planters, traders and analysts polled by Reuters.
That would be the lowest level since October. Easing stockpiles would help prop up benchmark prices of the edible oil, which have lost nearly 5% so far this year.
Palm prices were last down 1.6% on Monday at midday at 2,016 ringgit (US$486.25) per tonne.
Survey respondents also indicated they expected April production to ease to 1.64 million tonnes, down 1.9% from March. Actual production at that level would be the highest for the month of April since 2015.
“This year’s April production will be near last year’s April level,” said Phang Loy Fatt, an official with the marketing division of Kuala Lumpur Kepong Bhd.
“Though it’s expected to be marginally lower month-on-month, it’s still high during this time of the year as production in March at 1.67 million tonnes was a record high for the month,” Phang said.
Output in Malaysia, the world’s second-largest producer after Indonesia, posted record levels during the first quarter, with January, February and March all at the highest for those months, according to Refinitiv Eikon records going back to January 2000.
Poll respondents also said April exports likely rose 1.6% from the previous month to 1.64 million tonnes, which would be a second month of gains.
“April exports should be only slightly better (from March), as all buying was done in March,” said a Kuala Lumpur-based trader, referring to strong buying in March ahead of Ramadan.
The Muslim fasting month began on Monday and celebrants have begun breaking day-long fasts with communal feasting, increasing palm oil use for food and cooking.
Importers from key palm markets such as India and the Middle East typically stock up on the edible oil one to two months ahead in preparation for the festival.
“Destination markets are all full now,” said the trader, adding that importers from now would buy palm oil only on an as-needed basis.
Official palm oil data will be published by the Malaysian Palm Oil Board on May 10.
The median results from the Reuters survey put Malaysia’s consumption in April at 231,721 tonnes.