Image: Reuters Berita 24 English - According to data from the industry regulator, Malaysia's palm oil stocks at the end of June incre...
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| Image: Reuters |
Berita 24 English - According to data from the industry regulator, Malaysia's palm oil stocks at the end of June increased to their highest level in seven months as rival Indonesia's plans to increase its own shipments stifled Malaysia's exports.
According to the Malaysian Palm Oil Board, inventories in Malaysia, the second-largest producer in the world, increased 8.76% from the previous month to 1.66 million tonnes, the highest level since November (MPOB).
Production of crude palm oil increased 5.76 percent from May to 1.55 million tonnes, matching its seven-month high.
The production increase was, however, less than anticipated, highlighting the ongoing supply problems caused by labour constraints at the majority of plantations, according to a dealer headquartered in Kuala Lumpur.
After Indonesia restored a temporary export restriction in May and instead established a number of rules to boost international shipments, exports fell 13.26% to 1.19 million tonnes.
Last week, Indonesia announced its intention to raise the percentage of palm oil-based fuel in its biodiesel, or B35, from 30% to 35% starting on July 20.
In order to boost exports and lower large inventories, it is also considering reducing its export levy.
Ivy Ng, regional head of plantations research at CGS-CIMB Research, wrote in a note that the B35 biodiesel policy will contribute in increasing domestic palm oil consumption, decreasing stockpiles, and enhancing domestic pricing sentiment.
She said, "However, given that the extra absorption rate of crude palm oil is predicted at 134,000 tonnes per month, it will take time for the programme to effectively cut stockpiles."
The numbers from the Malaysian Palm Oil Board and Reuters' estimates for June (volumes in tonnes) are broken out as follows:
June 2022 poll conducted in May 2022* in June 2021
Production 1,545,129 1,582,500 1,461,032, and 1,606,187
Inventories 1,655,073 1,708,567 1,521,826 1,614,219
Exports totaled 1,193,861 1,224,128 1,376,416 1,419,004 dollars.
brings in 59,195, 80,000, 57,763, and 113,126 foreign goods.
* Denotes updated data from the Malaysian Palm Oil Board.
