Output of palm oil in Malaysia, the world's top producer, could be 3.5 percent higher in July than June as crops begin a fresh ascent in yield, a Reuters survey showed on Thursday. Closing stocks could be up 8.59 percent, said analysts from five plantation firms that usually participate in the poll. The survey put July production of palm oil at a median of 1,248,926 tonnes.
Output in June officially stood at 1,206,718 tonnes, down 7.14 percent from May. Planters had blamed the drop on crop fatigue after three straight months of record production from March.
Analysts said a pick up in output was likely this month due to friendlier crop weather.
But they added that growth will be moderate as oil palm trees in the eastern states of Sabah and Sawara which account for about 40 percent of production were still stressed from the higher cycles seen in the year.
"I think the peak in production will only come between end of August and beginning September," said one analyst. The median estimate for exports in July was 1.0 million tonnes, down 14.45 percent from June's 1,168,895 tonnes.