August 5, 2019 / 5:06 AM / 14 days ago

PREVIEW-Malaysia July palm stocks to see first gain in 5-months -Reuters survey

    * July stocks seen edging up 1.8% to 2.47 mln T -survey
    * Output seen up 11.4% at 1.69 mln T -survey
    * Exports forecast to rise 3.8% to 1.44 mln T -survey
    * Malaysian Palm Oil Board data due Aug. 13

    By Emily Chow
    KUALA LUMPUR, Aug 5 (Reuters) - Malaysian palm oil
stockpiles likely rose for the first time in five months, edging
up to a three-month high, as production gains outpaced a rise in
exports, a Reuters survey showed.     
    Inventories in Malaysia, the world's second-largest palm oil
producer, are forecast to have gained 1.8% from the previous
month to 2.47 million tonnes at end-July, according to a median
estimate of seven planters, traders and analysts polled by
Reuters. MYPOMS-TPO
    Stockpiles had earlier declined for four consecutive months,
easing from the 3 million tonne mark at the start of the year.  
    Increased inventory risks weighing on benchmark palm oil
prices, which fell to a near four-year low in mid-July
at 1,916 Malaysian ringgit ($459.09) per tonne. Prices have
since rebounded about 9% and were last at 2,085 ringgit.
    Rising stockpiles were aided by higher output. The survey
estimated production would rise 11.4% to 1.69 million tonnes,
its highest level since January and the biggest monthly gain in
10 months. MYPOMP-CPOTT
    "July output rose due to seasonal factors and more working
days," said Ivy Ng, regional head of plantations research at
CIMB Investment Bank, in a report. 
    The output gains were also likely aided by higher yields in
Sarawak's oil palm estates, and July's rise in inventory
indicated that "palm oil stocks may have bottomed in June," Ng
said.
    Palm oil exports were seen rising 3.8% from June to 1.44
million tonnes in July, supported by demand from key markets
India, the European Union and China. MYPOME-PO
    "India is restocking ahead of festivals, while the EU is
buying ahead of possible import duties over palm," said
Anilkumar Bagani, research head of Sunvin Group, a Mumbai-based
vegetable oil broker, referring to possible duties on EU imports
of Indonesian biodiesel.
    "China is also buying as its oilseeds crush has slowed down
due to the African swine fever, and they have to buy other
vegetable oils to fulfil demand," he added. 
    China, the world's largest pork producer, typically imports
soybeans to crush for meal, leaving soyoil as a byproduct for
cooking and other food purposes, but a severe disease outbreak
has curbed demand for meal.  
    Official palm oil data will be published by the Malaysian
Palm Oil Board ‪after 0430 GMT on Aug. 13. 
    The median results from the Reuters survey put Malaysia's
consumption in July at 292,615 tonnes. 
    
    Breakdown of July estimates (in tonnes): 
                         Range              Median
 Production      1,625,000 - 1,791,522     1,692,000
 Exports         1,420,000 - 1,480,000     1,435,000
 Imports            60,000 - 100,000        80,000
 Closing Stocks  2,430,000 - 2,613,979     2,468,000
 
* Official stocks of 2,423,615 tonnes in June plus the above
estimated output and imports yield a total July supply of
4,195,615 tonnes. Based on the median of exports and closing
stocks estimate, Malaysia's domestic consumption in July is
estimated to be 292,615 tonnes. 

($1 = 4.1735 ringgit)
    

 (Reporting by Emily Chow; editing by Richard Pullin)
  
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