KUALA LUMPUR: Malaysia's palm oil inventories at the end of December likely shrunk to their lowest in five months, squeezed by a slump in production, a Reuters survey showed on Wednesday.
Stocks at the world's second-largest producer are forecast to fall 4.9% from the previous month to 1.73 million tonnes, according to the median estimate of ten planters, traders and analysts polled by Reuters.
Production is pegged to plunge 8.6% to 1.49 million tonnes, the lowest since March, as severe flooding across the country disrupted harvesting activities.
"The extent of the damage done by the recent floods in Peninsular Malaysia has further stretched the output capacity of the plantations and estates," said Lee Toong Huang, General Manager of Kwantas Oil.
Exports are seen declining 4.9% to 1.4 million tonnes, in line with cargo surveyors' estimates.
Weak output is set to support prices as plantations enter the seasonal low production in the first quarter of 2022, while exports are expected to remain subdued due to high prices, said William Simadiputra, analyst at DBS Vickers Securities in Jakarta.
The Malaysian Palm Oil Board will release official data on Jan. 10.
Comments
Comments are closed for this article.