KUALA LUMPUR: Malaysia’s palm oil stockpile is pegged to tick up at the end of March, as a rise in exports and plummeting imports offset growing production, a Reuters survey showed on Monday.
Inventories in the world’s second-largest producer are forecast to rise 0.51% from February to 1.53 million tonnes, rising for the first time in five months, according to the median estimate of 10 planters, traders and analysts polled by Reuters.
That compares to 1.45 million tonnes recorded a year ago.
Output, which had been declining since October, is seen expanding 16.4% to a three-month high of 1.32 million tonnes.
Production is expected to recover after lower-than-expected output over the last two months, said William Simadiputra, an analyst at DBS Vickers Securities.
Exports are seen rising 6.3% to 1.17 million tonnes, in line with estimates from cargo surveyors showing a rise in shipments to top buyers India and China.
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Imports are forecast to drop nearly 22% to 117,000 tonnes.
Exports rose at the back of strong demand for palm olein particularly in the Middle East and countries with large Muslim populations to meet rising demand ahead of the Ramadan fasting month, said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.
“Countries like Egypt, Iran and Saudi Arabia which typically rely on sunflower oil had to switch to buying palm to meet the strong seasonal demand,” he said, adding that shipments of palm olein to the region will remain strong in April.
Global supply of sunflower oil has taken a hit after Russia’s invasion of Ukraine damaged port infrastructure and disrupted supply of the edible oil from the key Black Sea region, forcing buyers to seek alternatives.
However, that has also pushed up prices of palm oil to record highs in recent months, triggering demand rationing in some price-sensitive importers.
In April, a sustained rise in production aided by favourable weather outlook will keep prices under pressure, but the behaviour in crude oil prices will keep palm prices in check, Varqa said.
The Malaysian Palm Oil Board will release official data around April 11.
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