By Mei Mei Chu
KUALA LUMPUR, April 5 (Reuters) – Malaysia’s palm oil inventories at the end of March are seen tumbling to below 2 million tonnes to the smallest level in eight months, as exports soared ahead of the month of Ramadan, a Reuters survey showed on Wednesday.
Stockpiles in the world’s second-largest producer plunged 16.3% from February to 1.77 million tonnes, the lowest since July, according to the median estimate of 10 traders and analysts polled by Reuters. MYPOMS-TPO
Production, which had been declining for the past four months, rose nearly 2% to 1.28 million tonnes. MYPOMP-CPOTT
Exports jumped 25% to 1.39 million tonnes, as demand shifted to Malaysia after top producer Indonesia imposed some export restrictions to secure domestic supply. MYPOME-PO
The exports surge was due to a low base in February, when buyers turned to Indonesian palm oil in anticipation of changes to its export policy, and should not be read as a big figure, said Nagaraj Meda, Managing Director, TransGraph Consulting.
“This month (March), Indonesia exports fell sharply and partly the demand shifted back to Malaysia,” he said.
Marcello Cultrera, director at Singapore-based commodities consultancy Apricus 8 Pte Ltd, said demand is likely to hold higher on improved import margins, better relative value to soybean oil and Eid restocking.
However, production is unlikely to improve significantly until May, Cultrera said.
The Malaysian Palm Oil Board (MPOB) is scheduled to release its data on April 10.
Breakdown of March estimates (in tonnes):
Range
Median
Production
1,163,721-1,400,00
1,276,000
Exports
1,225,777-1,600,000
1,394,500
Imports
0-100,000
57,000
Closing stocks
1,671,271-2,100,000
1,774,594
* Official stocks of 2,119,509 tonnes in February plus the above estimated output and imports yield a total March supply of 3,452,509 tonnes. Based on the median of exports and closing stocks estimate, Malaysia’s domestic consumption in March is estimated to be 283,415 tonnes.
(Reporting by Mei Mei Chu; Editing by Martin Petty)
((meifong.chu@thomsonreuters.com; +603-2333-8005; Reuters Messaging: @meixchu on Twitter))
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