KUALA LUMPUR: Malaysia’s palm oil inventories at end-November likely shrank slightly from October as output slowed while imports jumped, a Reuters survey showed on Monday.

Stockpiles in the world’s second-largest producer were seen falling 0.47% from the previous month to 2.39 million tonnes, according to the median estimate of six traders and analysts polled by Reuters.

Production is pegged to decline 5% from October to 1.72 million tonnes.

“The La Niña weather phenomenon is underway in the Pacific Ocean in October and strengthened in November, impacting key oil palm planted areas in Borneo and potentially the east coast of Malaysia,” said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.

Palm oil firms as exports rise, ringgit falls

Exports are expected to climb 3% to 1.55 million tonnes, while imports likely rose 16.8%.

Strong demand for palm oil has been underpinned by a widening price discount against rival oils including soyoil.

The ringgit looks set to rise with a new government in place in Malaysia, Varqa said, adding that will make exports expensive, but that it may be offset by higher Indonesian palm prices inflated by levy and taxes.

The ringgit, palm’s currency of trade, has strengthened in the past week after the appointment of new Prime Minister Anwar Ibrahim, making the edible oil more expensive for buyers holding other currency.

The Malaysian Palm Oil Board is scheduled to release its data on Dec. 13.