By Ashley Tang and Rajendra Jadhav
KUALA LUMPUR/MUMBAI (Reuters) – Malaysia’s palm oil stocks fell for a third straight month in December to hit their lowest level since May 2023 as output fell due to flooding, data from the industry regulator.
Falling inventories in the world’s second-largest palm oil producer after Indonesia could support benchmark futures, which have corrected sharply in recent weeks after hitting their highest level in about two-and-a-half years in November. .
Malaysia’s palm oil stocks at the end of December fell 6.91% from the previous month to a 19-month low of 1.71 million metric tonnes, Malaysian Palm Oil Board data showed (MPOB).
Crude palm oil production fell 8.3% to 1.49 million tonnes, the lowest since March 2024, while palm oil exports fell 9.97% to a six-month low of 1.34 million tons.
A Reuters poll had forecast inventories at 1.76 million tonnes, production at 1.48 million tonnes and exports at 1.38 million tonnes. [PALM/POLL]
The December MPOB data is slightly bullish for the market as inventories fell more than expected due to a rise in local consumption, said Anilkumar Bagani, head of research at Mumbai-based vegetable oil broker Sunvin Group. .
Malaysia’s palm oil consumption rose 53% in December from the previous month to 309,865 tonnes, data showed.
Palm oil has been trading at a premium to soybean and sunflower oils, and needs to correct this to attract demand from price-sensitive buyers, said a Mumbai-based trader working with a global trading house.
“Even in January, exports are likely to remain subdued,” the trader said.
Below is a breakdown of Malaysian Palm Oil Board figures and Reuters estimates for December (volumes in tonnes).[PALM/POLL]:
December December 2024 November December
Survey 2024 2024 2023
Production 1,486,786 1,483,000 1,621,294 1,550,796
Inventories 1,708,747 1,755,000 1,835,641* 2,290,793
Exports 1,341,732 1,375,000 1,490,293* 1,362,145
Imports 37,917 22,500 22,081 40,062
*indicates figures reviewed by the Malaysian Palm Oil Board