Malaysia’s palm oil inventories are expected to have dwindled to the lowest in eight months at the end of March despite increased output as exports rose, a Reuters survey showed on Thursday.
Palm oil stocks are seen declining for a fifth consecutive month to 1.79 million metric tons, a 6.65% month-on-month drop, according to the median estimate of 10 traders, planters and analysts polled by Reuters.
Meanwhile, shipments are likely to have surged 21.22% to 1.23 million tons in March, driven by demand for Islamic holy month of Ramadan that started in mid-March.
“We are seeing an increase in exports in March and we expect the same momentum to continue in April and May,” Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari, said.
In March, crude palm oil (CPO) output in the world’s second biggest palm oil producer was seen rising by 9.76% on a monthly basis to 1.38 million tons, the first increase since November.
“El Nino weather forecast is expected to peak in May, paving the way for a flattish end stocks probably in July, August, September period,” Supramaniam said.
The Malaysian Palm Oil Board (MPOB) is scheduled to release its monthly palm oil data on April 15.