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NEWS ADMIN

DATE

12/06/2018

NEWS PROVIDER

Siti Safura Masiron

NEWS SOURCE

The Star Online

CATEGORY

HEADLINE

Palm oil production falls, exports plunge in May

12.06.2018 (The Star Online) - KUALA LUMPUR: Affin Hwang Capital Research maintained its neutral rating on the plantation sector following the sector's first on-year crude palm oil production decline since June 2017.

The research house said the decline in production was partly due to the fewer working days in May given the 14th general election holidays.

"FFB yield was lower in Peninsular Malaysia and Sabah at 1.33 MT/ha (-8.9% yoy) and 1.39 MT/ha (-13.7% yoy), respectively, but partially mitigated by better FFB yield in Sarawak by 4% yoy to 1.31 MT/ha."

For the five month till May 31, total CPO production increased 5.3% on year to 7.59 million metric tonnes.

"We expect Malaysia’s CPO production to improve going forward and we expect 2018E production to reach above the 20m MT level (2017: 19.92m MT) for the first time (Oil World 2018 CPO production forecast: 20.6m MT)."

The reinstatement of the Malaysian palm-oil export tax saw exports plunging 14.3% on-year and 15.7% on-month to 1.29 million metric tonnes.

"Selected key buyers including India and the EU bought less of Malaysia’s palm-oil products, declining by 72.5% and 19.6% yoy, respectively, to 75.3k MT and 136.2k MT. Meanwhile, China, Pakistan and Turkey bought more palm-oil products, increasing by 70.6%, 18.9% and >100% yoy, respectively, to 193.1k MT, 128.7k MT and 98k MT."

However, despite the decrease in exports, inventory slipped further in May to its lowest level in eight months at 2.17 million metric tonnes, which Affin Hwang believes was due to higher local consumption.

 

Read more at https://www.thestar.com.my/business/business-news/2018/06/12/palm-oil-production-falls-exports-plunge-in-may/#BKIT4wLxqrqthd7E.99