Malaysian palm oil output grows apace with exports, CPO prices around MR2,600/mt for 2017

04.05.2017

The average CPO front-month futures price was predicted at Malaysian ringgit 2,600/mt, or $602.06/mt, for 2017, as palm oil production and inventories were predicted to rise during April, said the April palm oil forecast note from Malaysia's CIMB Bank, released late Wednesday.

A CIMB survey of Malaysian plantations showed that April CPO output grew 9% month on month to 1.59 million mt. Malaysian CPO inventory in April was predicted to rise 7% month on month to 1.67 million mt, the note said.

The predicted rise in inventories took into account CPO export data from cargo surveyors Societe Generale de Surveillance and Intertek Testing Services, which showed a 4.5% month-on-month rise in April exports.

The growth in exports was predicted to come from increased demand from China, the EU and the US, the note said.

Meanwhile, the 9% month-on-month increase in April production was higher than the five-year historical April average rise of 6.4%, said the note. It is also higher than CIMB's earlier projection of a 2% month-on-month rise in yield from estates in Sabah.

CIMB expects the April output to rise 22% from 1.3 million mt in April 2016, according to data from the Malaysian Palm Oil Board.

However, the production forecast for May is tempered, at a 7.3% month-on-month growth, as the month has a greater number of public holidays than April and marks the start of the fasting period of Ramadan.


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