Palm oil stocks seen rising to 1.5m tonnes in April on higher output

by SHAHEERA AZNAM SHAH / pic by ARIF KARTONO

THE country’s crude palm oil (CPO) inventory is expected to ease in April to around 1.5 million tonnes compared to the 2.04 million tonnes in the same month last year, despite production starting to ramp up.

Singapore-based Palm Oil Analytics owner and co-founder Dr Sathia Varqa estimated Malaysia’s stockpiles for edible oil to record 1.53 million tonnes, a 25% lower than last year’s volume.

On a quarterly comparison, the anticipated volume, which will be released by the Malaysian Palm Oil Board (MPOB) next Monday, is about 5.5% higher than the stockpile volume recorded in March.

According to the survey by Palm Oil Analytics, monthly palm oil production will likely rise to 1.56 million tonnes, a 9.6% increase from 1.42 million tonnes last March while Malaysia’s imports volume is expected to see a 12.62% dip to 120,000 tonnes against 137,332 tonnes.

With the combination of the imports and production volumes, Malaysia’s palm oil supply would reach 3.13 million tonnes in April, a 9.04% increase compared to the previous month, while the export volume for April is expected to record an 8.28% increase to 1.28 million tonnes.

Reuters’ survey on the MPOB’s data for April revealed inventory will likely decline 0.27% to 1.44 million tonnes compared to March due to the robust exports and plunging imports.

Malaysia’s production could rise to 1.55 million tonnes, an 8.9% increase from the previous month while the export rose 10% to 1.3 million tonnes.

The polls also gathered that Malaysia’s imports could record a plunge of 21.4% to 108,000 tonnes.

The three-month CPO benchmark futures contract on Bursa Malaysia Derivatives Exchange fell RM2 to RM4,040 a tonne yesterday, and is trading at a 13-year high due to the price upcycle in commodities.

The plantation index on the local bourse closed lower at 6,916.85 yesterday, falling 1.07% from the previous close.

Among the counters that pulled the index lower were TDM Bhd, Rimbunan Sawit Bhd, Boustead Plantation Bhd and Kuala Lumpur Kepong Bhd.