Malaysia's palm oil stock falls to 4-month low as exports rise

13-Aug-2024 11:08 AM

Kuala Lumpur. Malaysia's outstanding palm oil stock has fallen for the first time in the last four months to a 4-month low as its exports have increased significantly. Although production also improved, exports increased more than that.

According to the latest monthly data from the government agency - Malaysian Palm Oil Board (Ampob), at the end of July 2024, the outstanding stock of palm oil in Malaysia fell by 5.35 percent to 17.30 lakh tonnes compared to June,

which is the lowest level since March. On the other hand, during the same period, palm oil production increased by about 14 percent to a high of 18.40 lakh tonnes, while exports of palm oil products increased by a whopping 40 percent to 16.90 lakh tonnes.

Cargo surveyors were already giving figures of a huge increase in palm oil exports. In a survey conducted a few days ago,

the industry and trade sector had estimated the production of 18.20 lakh tonnes of palm oil in Malaysia during the month of July and export of 15.20 lakh tonnes from Malaysia, and expressed the possibility of having a safe stock of 18 lakh tonnes of palm oil at the end of July.

According to trade analysts, the reduction in the outstanding stock is the basis for the improvement in the futures price of this important vegetable oil in Malaysia,

the world's second largest palm oil producer and exporter, which has come down to the lowest level in the last seven months. Due to the reduction in stock, there will be less pressure on the crushing-processing units.

But there is no possibility of a sudden sharp increase in the prices of palm oil because analysts believe that there will be heavy production of crude palm oil (CPO) during the current month (August) while its export performance will be somewhat weak.

In the first 10 days of August, the export of Malaysian palm oil is expected to fall by about 18 percent to around 4.35 lakh tonnes.