August 6, 2018 / 5:48 AM / 4 months ago

PREVIEW-Malaysia end-July palm oil stocks expected to hit 5-mth top

    * July stocks at 2.34 mln T, up 7 pct from June -survey
    * Output at 1.54 mln T, up 15.9 pct from June -survey
    * Exports estimated up 0.9 pct to 1.14 mln T -survey
    * Malaysian Palm Oil Board data due on Aug 10

    By Emily Chow
    KUALA LUMPUR, Aug 6 (Reuters) - Malaysia's palm oil stocks
are expected to have risen to their highest in five months at
end-July, a second straight gain as output growth outpaced
exports, according to a Reuters survey.
    Rising stockpiles could pressure benchmark palm oil prices
, which fell nearly to a three-year low on July 25.
Palm oil prices on Monday rose 0.8 percent to 2,214 ringgit
($543.31) a tonne by the midday break. 
    Palm oil stocks in the world's No.2 producer grew 7 percent
in July to 2.34 million tonnes from the previous month, highest
since February, according to a median estimate from eight
planters, traders and analysts surveyed by Reuters. MYPOMS-TPO
    A big rise in output was the main factor in the inventory
gains, with July having more working days compared to June, when
many workers took long leave for the Eid-al-Fitr holidays. 
    Production rose 15.9 percent from June to 1.54 million
tonnes, according to the survey, the first month-on-month gain
since March but the lowest for July since 2010. MYPOMP-CPOTT 
    "The production increase is due to a normalizing of working
days," said William Simadiputra, an analyst at DBS Vickers
Securities. 
    The survey pegged Malaysian exports as having gained 0.9
percent to 1.14 million tonnes in July, after three straight
months of decline. MYPOME-PO 
    Official palm oil data will be published by the Malaysian
Palm Oil Board ‪after 0430 GMT on Aug. 10. 
    Malaysian exports were not as competitive overall as those
from biggest producer Indonesia, said a Singapore-based trader. 
    "With the production growth in Indonesia, values have been
cheaper on exports from Indonesia versus Malaysia," he said. 
    The trader, however, expects demand for palm oil in the
longer term to pick up out of India and China, the world's top
two importers of the tropical oil. 
    "India buying to restock supplies and palm methyl ester (for
biodiesel) exports to China are two major drivers for increasing
exports," he said. 
    Malaysia's output is forecast to enter its high cycle in the
last quarter of the year, but full-year output could fall short
of forecasts and peak output could be delayed. 
    The median figures from the Reuters survey puts Malaysia's
consumption in July at 302,476 tonnes. 
    
    Breakdown of July estimates (in tonnes): 
                         Range              Median
 Production      1,450,000 - 1,700,000     1,544,666
 Exports         1,094,521 - 1,620,000     1,139,500
 Imports            40,000 - 85,000         51,300
 Closing Stocks  2,070,000 - 2,439,226     2,342,650
 
* Official stocks of 2,188,660 tonnes in June plus the above
estimated output and imports give a total July supply of
3,784,626 tonnes. Based on the median of exports and closing
stocks estimate, Malaysia's domestic consumption in July is
estimated to be 302,476 tonnes. 
    
    ($1 = 4.0750 ringgit)

 (Reporting by Emily Chow; Editing by Tom Hogue)
  
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