Malaysia's palm oil stocks at the end of February fell to the lowest levels in seven months as production hit a 10-month low, offsetting a slowdown in exports, the industry regulator said on Monday.
Reduction of stocks in Malaysia, second largest producer of palm, boosts futures, which fell 10% in 2023.
Malaysian palm stocks in February fell 5% to 1.92mt, the lowest since July 2023, according to MPOB. Palm production fell by 10.18% in January to 1.26mt, the lowest since April 2023. Exports plummeted by 24.75%.
Reuters forecast stocks in February: 1.91 million tons. (-5.7%); production 1.32 million tons; exports 1.14 million tons.
Palm Oil Market Dynamics Before Ramadan: Challenges and Changes
The MPOB report was within expectations, said Anilkumar Bagani, head of research at vegetable oil brokerage Sunvin Group. However, as production is falling and exports are increasing ahead of the Ramadan festival, lower stocks may provide some support. Palm consumption increases in Ramadan and Eid al-Fitr in March and April 2024. However, the potential for upside in palm oil prices is limited by the price premium relative to soybean oil and sunflower oil, which is forcing many buyers to switch to these cheaper alternatives, said a Mumbai-based trader.
In February, palm oil imports from top buyer India fell to their lowest levels in nine months as higher prices prompted buyers to reduce purchases of the oil and increase purchases of sunflower oil, they said. traders last week.
Source: Danial Azhar and Rajendra Jadhav | Notícias Agrícolas
