Indonesian palm oil shipments seen climbing to 13-month high


Indonesian palm oil exports probably rose to the highest level in 13 months in November as some buyers replenished stockpiles.

Exports of palm and kernels oils increased 5.4% from October to 2.54 million tonnes, according to the median of eight estimates from analysts, traders, refiners and plantation executives compiled by Bloomberg. That’s the highest since October 2015, data from the Indonesian Palm Oil Association showed. The association, known as Gapki, may release November data in January.

“Rising exports in November were due to the tight stocks situation in main buyers such as China and India,” said Derom Bangun, chairman of the Indonesian Palm Oil Board. Shipments may have been even higher if a surge in prices hadn’t curbed some demand, he said.

Palm oil, used in everything from cooking oil to cookies, has surged about 25% this year after one of the strongest El Nino events on record crimped production and tightened inventories in South-East Asia. China’s imports from Malaysia climbed 16% in November from a month earlier, according to Malaysian Palm Oil Board data. Stockpiles in the world’s second-biggest buyer have slumped more than 60% this year, according to Shanghai JC Intelligence Co data.

Palm oil for delivery in March rose 0.5% to RM3,108 a tonne by the midday break on Bursa Malaysia Derivatives. Futures rose 11% last month, the biggest gain since September 2015 and a fourth straight advance.

Indonesian palm oil production probably fell 4.8% to 3.38 million tonnes in November from a month earlier, the survey showed. Stockpiles slid 1.4% to 2.15 million tonnes, the median of seven estimates showed.

“Production is normally high in September and October and slightly dropped in November,” Bangun said.

Supply from producing regions in Sumatra was unstable, which suggests trees are still affected by adverse weather, he said.

Production in Malaysia dropped a more-than-expected 6.1% in November as adverse weather continued to affect trees. Godrej International Ltd’s Dorab Mistry last month lowered his outlook for Malaysian production in 2016 and said Indonesia’s output would decline this year. The two countries account for about 86% of global palm oil supply.

Oil palms typically enter a seasonally higher production cycle in the second half of the year that peaks between August and October, before dropping toward year-end and into the first quarter.


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