Image: Reuters Berita 24 English - Malaysia's palm oil stocks probably went over 2 million tonnes at the end of August for the first ti...
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| Image: Reuters |
Berita 24 English - Malaysia's palm oil stocks probably went over 2 million tonnes at the end of August for the first time in more than two years, according to a Reuters survey released Monday. This is because production went up.
Stockpiles rose 14.5% from the previous month to 2.03 million tonnes, which is the highest level since April 2020, according to the median estimate of nine traders and analysts polled by Reuters.
Production in the second-largest producer in the world went up by 8% to 1.7 million tonnes, which was a 10-month high.
Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics, said that August, which is the beginning of the peak production season, is likely to be the best month for production. This is because rains give the soil enough moisture and boost yields.
"The rise in production in September will slow down because it takes time for yields to recover," he said.
The country's exports fell by 0.14 percent to 1.32 million tonnes as prices became more competitive with Indonesia, which is a bigger competitor.
Cargo surveyors gave estimates that ranged from a drop of 3% to a rise of 1.6%. Shipments to China and the European Union went up, but key buyer India bought less.
Prices have been going down in August, said William Simadiputra, an analyst at DBS Vickers Securities in Jakarta. This is because there are more goods on the market.
In August, Malaysia's benchmark crude palm oil contract fell for the fourth month in a row, by 3.4%.
The data will be released on September 12 by the Malaysian Palm Oil Board (MPOB).
Estimates for August, broken down (in tonnes):
Range Median
Production: 1,650,001 to 1,809,594; 1,699,445
Exports 1,229,700-1,400,000 1,320,000
Imports 0-260,000 150,000
Closing stocks 1,850,000-2,132,388 2,030,000
*The official stocks for July, which were 1,772,794 tonnes, plus the above estimates of production and imports add up to 3,622,239 tonnes for August. Malaysia's domestic consumption in August is thought to be 272,239 tonnes based on the middle estimate of exports and closing stocks.
