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Oil Report

PREVIEW-Malaysia Jan palm oil stockpiles forecast to fall from record high

    * Jan stocks to fall 4.7 pct from Dec to 3.07 mln T -survey
    * Output to fall to 1.61 mln T, down 10.9 pct -survey
    * Exports estimated up 12.4 pct at 1.56 mln T -survey
    * Malaysian Palm Oil Board data due Feb. 11

    By Emily Chow
    KUALA LUMPUR, Feb 7 (Reuters) - Malaysia's palm oil
stockpiles at the end of January are forecast to fall from the
previous month's record high as production eases and exports
increase, according to a Reuters survey.    
    Falling inventories will add to the recovery in benchmark
palm oil prices since last November when they fell to
their lowest in three years. Palm futures were up 1.6 percent at
2,342 ringgit ($574.58) a tonne at the midday break on Thursday,
the highest since June 29.
    Stockpiles in Malaysia, the world's second-largest producer
of the edible oil, are forecast to fall 4.7 percent from the
previous month to 3.07 million tonnes, based on the median
estimate of eight planters, traders and analysts.
    This would be the first month of inventory declines after
seven gains. In December, stocks rose to 3.22 million tonnes, a
record high according to data on Refinitiv Eikon going back to
January 2000. MYPOMS-TPO
    "Exports are crucial in determining stocks," said a planter
in the eastern Malaysian state of Sabah, adding that anticipated
production declines in the first quarter of the year will
contribute to an inventory drawdown in the coming months.  
    "This is also a low seasonal production period, and with
February being the Lunar New Year month, production may still
fall," he said, referring to the national holiday when palm
workers typically take extended leave.
    In January, production is forecast to ease for a third
straight month, down 10.9 percent from December to 1.61 million
tonnes, according to the poll. MYPOMP-CPOTT 
    Palm oil production typically falls during the first quarter
of the year. 
    Additionally, the poll also showed Malaysia's January palm
exports rising 12.4 percent from December to 1.56 million tonnes
on stronger demand from Europe. MYPOME-PO 
    "The better than expected recovery in exports was due to
stronger demand from European Union countries," said Ivy Ng,
regional head of plantations research at CIMB Investment Bank.
    Official palm oil data will be published by the Malaysian
Palm Oil Board ‪after 0430 GMT on Feb. 11. 
    The median results from the Reuters survey put Malaysia's
consumption in January at 280,515 tonnes. 
    
    Breakdown of January estimates (in tonnes): 
                         Range              Median
 Production      1,520,000 - 1,672,435     1,610,500
 Exports         1,340,000 - 1,620,000     1,555,000
 Imports            50,000 - 110,000        75,000
 Closing Stocks  2,916,000 - 3,200,000     3,065,037
 
* Official stocks of 3,215,052 tonnes in December plus the above
estimated output and imports give a total January supply of
4,900,552 tonnes. Based on the median of exports and closing
stocks estimate, Malaysia's domestic consumption in January is
estimated to be 280,515 tonnes. 
    

($1 = 4.0760 ringgit)

 (Reporting by Emily Chow; Editing by Christian Schmollinger)
  
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