Malaysian CPO stocks rise as fall in exports outpaces output loss: report


Malaysian crude palm oil stocks were expected to increase by 11% month on month to 1.75 million mt at the end of November, according to CIMB Bank in its monthly sector note released over the weekend.

It cited lower exports to India and Pakistan as a reason, adding that the drop in exports outpaced production losses in the region. A survey of 25 Malaysian plantations by the CIMB showed that CPO output fell by around 3.5% month on month to 1.62 million mt in November.

However, CPO exports based on reports from surveyors SGS and ITS showed that exports had fallen 11.8% month on month from 1.43 million mt in October which amounts to 1.26 million mt as calculated by S&P Global Platts.

Weak demand from India and Pakistan, which are key importers of CPO, has dented Malaysian exports, CIMB said. The bank had earlier forecast a fall of around 5% in CPO exports but data from SGS and ITS suggests that November exports fell by almost 12% month on month. The Indian economy is battling a cash crunch caused by the demonetization exercise, which has removed an estimated 86.4% of the total cash in circulation.

Meanwhile, CPO production is projected to fall in November due to a 3.5% drop in fresh fruit bunches. This was lower than CIMB's earlier forecast of a 5% drop.

The CIMB survey revealed that production from Sabah and Sarawak plantations fell 5.5% and 5.1% respectively, while Peninsular Malaysian plantations' production remained flat in November.

CPO stocks remain low compared with a year ago with the projected stocks of 1.75 million mt almost 40% below the level seen a year earlier.


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