Oil Report

PREVIEW-Malaysia Aug palm stocks set to hit 13-month low - Reuters survey

    * Aug. stocks seen edging down 7.1% to 2.22 mln T -survey
    * Output seen slightly up 1.8% at 1.77 mln T -survey
    * Exports forecast to rise 14.5% to 1.70 mln T -survey
    * Malaysian Palm Oil Board data due Sept. 10

    By Emily Chow
    KUALA LUMPUR, Sept 5 (Reuters) - Malaysian palm oil
stockpiles are forecast to fall for a sixth straight month in
August to the lowest in more than a year, as stronger exports
outpace a slight rise in output, a Reuters survey showed. 
    Inventories in Malaysia, the world's second-largest palm oil
producer, are expected to fall 7.1% from the previous month to
2.22 million tonnes at end-August, the lowest since July 2018,
according to a median estimate of seven planters, traders and
analysts polled by Reuters. MYPOMS-TPO
    A further inventory decline could support benchmark palm oil
prices, which rose to a seven-month high last week.
Prices have since eased, but was last up 0.3% at 2,187 ringgit
($521.96) on Thursday evening.
    The expected drawdown in stocks was due mainly strong gains
in exports, which were seen rising 14.5% from July to 1.70
million tonnes in August. 
    It would be the second consecutive month of gains, and the
sharpest monthly rise since March, with poll respondents
pointing to increasing demand from India and China. MYPOME-PO
    India, the world's largest edible oils importer has posted a
strong jump in imports of refined palm oil from Malaysia this
year following a change in Indian duties. On
Wednesday it boosted the tax for six months.
    China, another key edible oils buyer, has also been relying
on palm as a soyoil substitute, as a trade war with the U.S. has
curbed soybean imports after Beijing imposed tariffs on American
    The survey pegged August output at 1.77 million tonnes, up
1.8% from the previous month, to the highest since December
2018, although three poll respondents forecast falling output.
    "Production in many regions was down month-on-month during
the first half of August, partly due to the dry weather," said a
manager at a plantations company, who declined to be named as he
was not authorized to speak to the media. 
    "However, rains during the last 10 days of the month,
especially in East Malaysia, after a relatively long dry spell
have given a boost in production." 
    Poll respondents added that output would rise from now until
the year-end, estimating peak production to be around October to
November this year.
    Official palm oil data will be published by the Malaysian
Palm Oil Board ‪after 0430 GMT on Sept. 10. 
    The median results from the Reuters survey put Malaysia's
consumption in August at 304,677 tonnes. 
    Breakdown of August estimates (in tonnes): 
                         Range              Median
 Production      1,668,000 - 1,830,000     1,770,000
 Exports         1,570,000 - 1,722,851     1,700,000
 Imports            40,000 - 80,000         65,000
 Closing Stocks  2,110,000 - 2,420,000     2,222,000
* Official stocks of 2,391,677 tonnes in July plus the above
estimated output and imports yield a total August supply of
4,226,677 tonnes. Based on the median of exports and closing
stocks estimate, Malaysia's domestic consumption in August is
estimated to be 304,677 tonnes. 

($1 = 4.1900 ringgit)

 (Reporting by Emily Chow; editing by Richard Pullin)