September 5, 2018 / 8:14 AM / 20 days ago

PREVIEW-Malaysia August palm oil stocks forecast to rise to six-month high

    * Aug stocks at 2.41 mln T, up 9 pct from July -survey
    * Output at 1.65 mln T, up 9.9 pct from July -survey
    * Exports estimated up 2.3 pct to 1.23 mln T -survey
    * Malaysian Palm Oil Board data due on Sept. 12

    By Emily Chow
    KUALA LUMPUR, Sept 5 (Reuters) - Palm oil inventories in
Malaysia, the world's second largest producer, are forecast to
rise at the end of August for a third month to the highest since
February, as output growth outpaced exports, according to a
Reuters survey.
    Rising stockpiles could dampen benchmark palm oil prices
, which rose in August by 2.5 percent from July. Palm
oil prices were last down 0.4 percent at 2,289 ringgit ($552.23)
a tonne on Wednesday afternoon.
    August end-stocks are forecast to rise to 2.41 million
tonnes, according to the median estimate of ten planters,
traders and analysts surveyed by Reuters. That would be a 9
percent increase from the previous month and its biggest monthly
gains since November 2017.  MYPOMS-TPO 
    Production also jumped by 9.9 percent from July to 1.65
million tonnes, its highest levels so far this year but its
lowest level for August since 2010. MYPOMP-CPOTT 
    "A seasonal uptick in yields boosts fresh fruit bunch output
in August," said Ivy Ng, regional head of plantations research
at CIMB Investment Bank.
    "Estates in Sarawak posted the higher month-on-month
production increases, followed by those in Peninsular Malaysia.
Sabah estates posted the smallest month-on-month rises in
production."
    Malaysia's 2018 full year output however could decline from
last year's 19.92 million tonnes, said industry analysts, as
production normalizes after a post-El Nino bumper crop.

    A lack of labour and an old tree profile in Malaysia also
contributes to slower output this year, said Oscar Tjakra, a
senior analyst at RaboResearch.
    "Due to lower crude palm oil prices, some companies may also
be applying less fertilizer," he added.  
    The survey pegged Malaysian exports for August at 1.23
million tonnes, a 2.3 percent increase from last month and the
highest in three months. MYPOME-PO
    "Exports see some improvement, but the growth is not
significant," forecast a Malaysian planter.
    Palm oil demand in recent weeks has been sluggish as sliding
emerging market currencies have reduced the purchasing power for
palm importers. Higher import duties in key importer India also
added to demand weakness.
    Traders, however, are largely expecting Malaysian demand to
pick up in September due to a zero percent export tax rate for
crude palm oil. 
    Official palm oil data will be published by the Malaysian
Palm Oil Board ‪after 0430 GMT on Sept. 12. 
    The median figures from the Reuters survey puts Malaysia's
consumption in August at 270,311 tonnes. 
    
    Breakdown of August estimates (in tonnes): 
                         Range              Median
 Production      1,578,381 - 1,800,000     1,651,771
 Exports         1,180,000 - 1,700,000     1,232,965
 Imports            13,000 - 80,000         50,000
 Closing Stocks  2,200,000 - 2,464,226     2,413,060
 
* Official stocks of 2,214,565 tonnes in July plus the above
estimated output and imports give a total August supply of
3,916,336 tonnes. Based on the median of exports and closing
stocks estimate, Malaysia's domestic consumption in August is
estimated to be 270,311 tonnes. 
    
($1 = 4.1450 ringgit)

 (Reporting by Emily Chow; Editing by Christian Schmollinger)
  
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