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UPDATE 2-Malaysia Dec palm stocks hit record high, 2018 output at 19.5 mln T

* Malaysia palm stocks end year at record high of 3.2 mln T * Malaysia 2018 full-year output at 19.5 mln T * December exports edge up after two months of falls * Interactive chart: https://tmsnrt.rs/2AEoVCt (Adds graphic) By Emily Chow KUALA LUMPUR, Jan 10 (Reuters) - Malaysia's palm oil inventory rose to a new high at end-December, ending the year above 3 million tonnes at a near-two-decade top, official data showed on Thursday. End-stocks in the world's second largest producer and exporter of palm oil rose for a seventh consecutive month, up 6.9 percent to 3.21 million tonnes, data from the Malaysian Palm Oil Board (MPOB) showed. The levels are the highest since January 2000, according to Refinitiv Eikon data. <MYPOMS-TPO> This could weigh on prices of palm oil, used in the making of a wide variety of goods from cosmetics and cookies to cooking oil and biodiesel. Benchmark prices in the past month have edged up from three-year lows, and last traded 0.2 percent down at 2,178 ringgit ($531.87) a tonne. The MPOB data also showed that production fell 2 percent from the previous month to 1.81 million tonnes in December. This would be a second month of output declines to the lowest in three months. <MYPOMP-CPOTT> This would also put Malaysia's 2018 production at 19.5 million tonnes, down from 19.9 million tonnes the previous year. "We had expected production to drop more significantly, so this is a sign of concern in the near term. By right, production in December and January should be coming down more," said a Kuala Lumpur-based trader. "But due to the festive season and shorter month of February, production should soon be on a sharper downtrend, so that could be price-supportive in the near term." Meanwhile, exports gained 0.6 percent to 1.38 million tonnes from November, after two earlier months of declines. "Demand in December was quite soft, but we are positive on exports going forward," said the trader, adding that demand from key markets India and China should be rising soon. "Current stocks in Malaysia and Indonesia are pretty high, but I believe the biodiesel mandates will help bring down those levels, even though output is declining less than expected." India, the world's largest importer of edible oils, lowered its duty on crude and refined palm oil imports earlier this month. Palm oil demand is also expected to be supported by seasonal demand ahead of China's Lunar New Year in February, which sees more palm oil being used for cooking purposes. Malaysia earlier announced plans to raise the minimum bio-content in biodiesel to 10 percent for the transport sector and 7 percent for the industrial sector, while Indonesia enforced a mandatory bio-content mix of 20 percent for all diesel machines in the country. The measures by the world's top two palm producers are expected to increase domestic consumption and lower stockpiles. A Reuters survey had forecast palm oil's end-December stockpiles to edge up 4.3 percent to 3.14 million tonnes, while production was seen falling 3.6 percent to 1.78 million tonnes. Exports were also forecast to gain 4.7 percent to 1.44 million tonnes. The following is a breakdown of the Malaysian Palm Oil Board figures and Reuters estimates for December: (volumes in tonnes) Dec 2018 Dec 2018 poll Dec 2017 Nov 2018 Output 1,808,038 1,779,000 1,834,165 1,845,222* Stocks 3,215,052 3,136,736 2,732,093 3,007,086* Exports 1,383,307 1,140,000 1,427,425 1,375,406* Imports 108,621 70,000 14,991 134,352 *denotes revised figures ($1 = 4.0950 ringgit) (Reporting by Emily Chow; Editing by Sunil Nair)

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