The stocks of Palm oil in Malaysia rose in August to their highest level in six months. This was due to a significant increase in monthly production, which reached its highest level in nine years, while exports slowed, the information was released on Tuesday by the Malaysian Palm Oil Board (MPOB), the industry regulator.
Rising inventories in the country, which is the world's second-largest palm oil producer after Indonesia, could impact benchmark futures prices, which are already near their lowest level in seven months.
According to the MPOB, Malaysia's palm oil stocks at the end of August rose 7.34% from the previous month, reaching 1.88 million tonnes, the highest volume since February.
Palm oil production grows, but exports fall and put pressure on the market
Crude palm oil production also saw an increase of 2.87% in August to 1.89 million tonnes. This was the highest level since October 2015, according to data released by MPOB on Tuesday.
On the other hand, palm oil exports fell by 9.74% in the same month, totaling 1.53 million tons, according to the regulator.
A Reuters poll had estimated stockpiles would reach 1.86 million tonnes, with production of 1.89 million tonnes and exports of 1.5 million tonnes.
According to Anilkumar Bagani, head of research at Mumbai-based Sunvin Group, the MPOB data is neutral for the palm oil market as inventory levels are in line with expectations and still below the previous year’s levels. “September production is likely to continue to be high, but there is still no sign of a pick-up in demand from key markets such as India and China, which could put pressure on prices,” a Mumbai-based trader added.
Source: Danial Azhar and Rajendra Jadhav | Notícias Agrícolas
