PREVIEW-Malaysia Nov palm stocks likely climbed as exports slipped

Thu Dec 5, 2013 4:52am EST

* Nov stocks seen at 1.98 mln T from 1.85 mln T in Oct
    * Output seen at 1.95 mln T vs 1.97 mln T in Oct
    * Exports seen at 1.59 mln T vs 1.66 mln T in Oct
    * Malaysian Palm Oil Board data due Dec. 10, after 0430 GMT

    By Anuradha Raghu
    KUALA LUMPUR, Dec 5 (Reuters) - Malaysian palm oil stocks
likely rose in November, a Reuters survey showed, as a dent in
production did little to offset softer winter demand for the
tropical oil.
    Demand for palm oil typically dwindles as the northern
winter approaches and buyers cut back purchases of palm oil
because it solidifies in cold temperatures, opting for rival
edible oils such as soyoil instead. 
    But the rise in stocks, estimated to be at their highest
since March, was limited by the onset of a monsoon season that
hampered output in some parts of second-largest grower Malaysia.
    A survey of five planters and traders showed that
inventories likely rose to 1.98 million tonnes in November, a
7.2 percent increase from October's 1.85 million tonnes. 
    November production could have fallen by 1 percent from
October to 1.95 million tonnes as palm's seasonal peak faded and
wet weather complicated harvesting.
    The market had initially expected November's output to fall
more steeply, but planters said the rains could have instead
encouraged yields of fresh fruit bunches.
    "Generally production has been excellent in November for our
operations in Malaysia and Indonesia," an official at a
plantation firm told Reuters.
    Exports were seen falling 4.0 percent from a month ago to
1.59 million tonnes, according to the survey.
    Cargo surveyors earlier this week reported that Malaysian
palm oil shipments fell between 4.8 and 4.9 percent on weaker
demand for refined palm olein typically used in cooking oil.
    The median figure from respondents implied domestic
consumption in October of around 246,749 tonnes. Consumption
generally ranges from 150,000 to 180,000 tonnes.
    Malaysian imports of palm oil products likely slipped to
20,028 tonnes in November from 22,503 tonnes in October.   
    The Bursa Malaysia Derivatives Exchange's palm oil benchmark
futures rose 2.4 percent in November -- after rising
more than 10 percent in October -- lifted by hopes of weaker
output in Malaysia and Indonesia, which together account for
nearly all of the world's palm oil supply.
    Palm prices also firmed after a deadly typhoon in the
Philippines sparked fears of a coconut oil shortage from the
world's No.1 exporter, driving buyers to seek palm oil-based
    Rising demand for biofuels could help lift prices to 3,000
ringgit ($930) per tonne in March 2014, leading vegetable oil
analyst Dorab Mistry said at an industry meet, buoyed by higher
biodiesel mandates in Indonesia, Malaysia and soy-producing
Brazil and Argentina. 
    Palm oil futures are currently running just over 2,600
    Industry regulator the Malaysian Palm Oil Board said palm
oil stocks in Malaysia could fall to 1.87 million tonnes by
end-2013, down nearly 30 percent from last year, and decline
further in the coming year as foreign and domestic demand for
the edible oil outpaces production. 
    Output in Malaysia has faltered after monsoon floods hit
major palm-growing states Johor and Pahang. Flooding makes
harvesting more difficult and palm fruit can't be trucked to
mills as roads from the plantation are often impassable.
    Malaysia's Meteorological Department has warned that flood
waters could take days to recede. As of Thursday, more than
30,000 people in flood-hit states had been evacuated. 
    But some planters say output might not see a steep drop
unless the bad weather stretches out. 
    "I think output in December could be down by 3 percent, but
it's too early to say. There's some flooding now, but if it
disappears in the next two weeks then there's no problem," the
official at a plantation firm added.  
    Breakdown of November's estimates (in tonnes):              
                        Range                 Median*           
  Production      1,930,000 - 2,070,861     1,952,527           
  Exports         1,550,000 - 1,659,105     1,592,741           
  Imports            10,000 - 22,503           20,028         
  Closing stocks  1,900,671 - 2,015,000     1,978,647        
  * Official stocks of 1,845,312 tonnes for October, plus the
above estimated output and imports give a total November supply
of 3,817,867 tonnes. Based on the median of the export and
closing stock estimates, Malaysia's domestic consumption in
November would be 246,479 tonnes.
($1 = 3.2245 Malaysian ringgit)

 (Editing by Tom Hogue)
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