Malaysia end-April palm oil stockpile seen up after five months of falls

[May 06, 2022]  By Mei Mei Chu

KUALA LUMPUR (Reuters) - Malaysia's palm oil inventories at the end of April likely rose for the first time in six months as production and imports climbed, a Reuters survey showed on Friday.

Stockpile was seen climbing 5.2% from the previous month to 1.55 million tonnes, its highest since January, according to the median estimate of eight planters, traders and analysts polled by Reuters.

Output in the world's second-largest producer was pegged 4.9% higher at a five-month peak of 1.48 million tonnes.

Exports likely fell 5.6% to 1.2 million tonnes, while imports were seen nearly 12% higher at 95,000 tonnes.

Meanwhile, cargo surveyors have estimated a steeper decline of between 13.6% and 16% in exports as key buyers China, India, and Europe slowed purchases amid soaring prices.

"Indonesia's policy will be extremely critical for the month of May," said Ronny Lau, a trader with Singapore-based commodities trading firm Four Bung.

Export demand for Malaysian palm oil is set to rise after top producer Indonesia last month temporarily banned shipments in a bid to tame soaring cooking oil prices.

The policy will lead to increasing foreign demand switching over to Malaysia and Thailand, said Marcello Cultrera, an independent broker in Kuala Lumpur.

Exports from Indonesia will fall by 1.3 million tonnes to 1.5 million tonnes, leading to higher inventories in May, Cultrera said.

A Sime Darby Plantation worker shows palm oil fruits at a plantation in Pulau Carey, Malaysia, January 31, 2020. Picture taken January 31, 2020. REUTERS/Lim Huey Teng

However, traders and analysts said the ban, which came into force on April 28 and pushed benchmark prices to a record closing high, will only last for a few weeks as Indonesia relies on export taxes to fund its biodiesel programme.

The Malaysian Palm Oil Board will release its data on May 10.

Breakdown of April estimates (in tonnes):

Range Median

Production 1,400,000-1,538,224
1,480,000

Exports 900,000-1,391,900 1,195,000

Imports 50,000-120,000 95,000

Closing stocks 1,467,000-1,754,586 1,550,000

* Official stocks of 1,472,810 tonnes in March plus the above estimated output and imports yield a total April supply of 3,047,810 tonnes. Based on the median of exports and closing stocks estimate, Malaysia's domestic consumption in April is estimated to be 302,810 tonnes.

(Reporting by Mei Mei Chu; Editing by Kanupriya Kapoor and Subhranshu Sahu)

[© 2022 Thomson Reuters. All rights reserved.]This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.