PALMOILMAGAZINE, KUALA LUMPUR – Palm oil stocks in Malaysia are expected to reach their highest point in the past six months, extending until August, due to increased production coupled with a decline in exports.
According to a Bloomberg survey, palm oil stocks have surged by approximately 10% compared to the previous month, totaling 1.90 million tons. This marks a notable 27% increase from the lowest point recorded in April and could potentially signify challenges in establishing a reference price.
The survey also indicates that crude palm oil (CPO) has risen by about 7.5%, reaching 1.73 million tons—marking the highest inventory levels since October 2022. However, the export figures are expected to decrease by 1.5%, dropping to 1.33 million tons, following a 16% increase in the previous month.
As quoted from Bloomberg, CPO price at Kuala Lumpur Exchange would be difficult to be always at psychologic price at RM 4.000 when there is a worry that the expensive price would decrease palm oil demands. At Malaysia Derivatives Exchange CPO got cheaper on Tuesday 0,6% to be RM 3,961 per ton in the midday.
The investors also noticed the palm oil production in Malaysia and the peak harvest could be in September and October 2023. Though the stock could be accumulated for some months to go, it is predicted to be limited by the slowing increasing production from the estimation and the stable demands from the consumers for heading religious days.
“Just like in China, there would be Golden Week festival and in India there would be Diwali in November,” Senior analyst in Fastmarkets Palm Oil Analytics, Sathia Varqa said. (T2)