The Star Online (14/09/2018) - PETALING JAYA: Malaysia’s palm oil stocks rose 12% month-on-month (m-o-m) and 28% year-on-year (y-o-y) in August on the back of weak exports, despite lower CPO production during the month.
Exports fell 8% m-o-m and 26% y-o-y to 1.1 million tonnes last month, representing the lowest monthly palm oil exports for the year-to-date, and the lowest for the month of August since 2002.
Among major export destinations, export to European Union declined by 49% m-o-m to 80,129 tonnes, while export to Pakistan also fell 27% to 56,450 tonnes. CGS-CIMB Research said the weaker demand from key importers could be partly due to the shift in CPO exports to September from August to enjoy the zero export tax starting next month.
“Also, traders could be holding back purchases in anticipation of lower prices in the coming months,” it said in a note.
The rise in stockpiles was 1% above its forecast and 3% above Bloomberg’s and Reuters’ estimates.
The research house said the larger-than-expected stockpile would be negative for CPO prices in the short term, although partially offset by stronger exports for palm oil in the first 10 days of September.
According to cargo surveyor SGS, palm oil exports in the first 10 days of September were 44.4% higher than during the first 10 days of August. CGS-CIMB Research estimates that palm oil stocks will rise 12% m-o-m to 2.78 million tonnes at end-September 2018, with production to grow 8% driven by seasonal factors.
Read more at https://www.thestar.com.my/business/business-news/2018/09/14/august-palm-oil-inventory-rises-on-weak-exports/#XJqYozxfZLJWeXZZ.99