Malaysian Jan palm oil inventories to fall 11% from Dec on export hike: CIMB

06.02.2017

Malaysia's palm oil inventories were projected to fall 10.7% month on month to 1.49 million mt in January as CPO output was estimated to fall 7% over the same period to 1.37 million mt while exports increased, Malaysia- based CIMB bank said in a January palm sector note released Saturday.

Export volumes surprised to the upside, rising 6.2% month on month to around 1.35 million mt in January, based on data collated from cargo inspectors SGS and ITS, CIMB said in the note.

CIMB had previously forecast a 5% month-on-month fall in January exports, but stronger-than-expected demand from the US and other countries contributed to the rise and offset weaker demand from China, India, the EU and Pakistan, it added.

Palm oil production in Malaysia was rebounding as the impact of the El Nino weather event in 2016 faded, CIMB said.

The forecast 7% drop in January fresh fruit bunches or FFBs from December was well below the five-year average January decline of 13.5%, it added. CPO output was projected to rise 21% from 1.13 million mt in January 2016.

CPO prices in February were expected to receive support from the seasonal production downturn amid stronger exports. CIMB forecast CPO futures trading in the range of MR3,000-3,300/mt ($677-$744/mt) region in February.

In January, CPO futures traded in the range of MR3,178-3,271/mt, according to S&P Global Platts data.

Malaysia's official inventory data for January is due for release on February 10.


platts

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