KUALA LUMPUR: At the end of February, Malaysia’s palm oil inventories were down much less than market expectations as exports declined, industry regulator data showed on Thursday.
Stockpiles in the world’s second-largest producer of palm oil fell 2.12per cent from January to 1.52 million tonnes, its lowest level in seven months, according to Malaysian Palm Oil Board (MPOB) data.
“The MPOB report on first sight is slightly bearish as market was trading for a lower stock scenario of 1.29-1.38 million tonnes,” Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
A survey had pegged inventories to drop 11.4per cent.
Production, which has been affected by severe labour shortages and flooding, contracted 9.26per cent to 1.14 million tonnes, a one year low.
February exports had been widely expected to climb, but instead also slid to one-year low. It fell 5.32per cent to 1.1 million tonnes.
Comparatively, cargo surveyors had estimated exports to rise between 7.2per cent and 9.6per cent.
Imports surged two folds to 149,833 tonnes.
“Exports to Middle East seem to have taken a large hit,” said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.
Prices will be under pressure, but the contract is still supported by a bullish external markets, he added.