KUALA LUMPUR: Malaysia’s end-February palm oil inventories tumbled to the lowest in six months as production and imports plummeted, data issued by the nation’s palm oil board showed on Friday.
Stockpiles fell 6.56% from January to 2.12 million tonnes, the lowest since August, according to the Malaysian Palm Oil Board (MPOB).
Hammered by seasonal flooding, crude palm oil production shrank to a one-year low. Output in the world’s second-largest producer fell 9.35% to 1.25 million tonnes, down for a fourth month.
Exports slipped 1.99% to a 10-month low of 1.11 million tonnes. Imports fell 63.8%.
“Stocks fell lower than expected after a rise in domestic use,” said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.
Large government spending on food items for flood victims likely to have boosted domestic consumption of palm oil, in addition to higher consumption during the Chinese New Year festivities, he said.
Palm oil snaps three-day decline
Inventories could fall below 2 million tonnes by the end of April, as exports climb after Indonesia restricted overseas sales, Ahmad Parveez Ghulam Kadir, director general of MPOB told Reuters this week.
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