December 5, 2018 / 5:41 AM / 12 days ago

PREVIEW-Malaysia Nov palm oil stocks seen at 3 mln tonnes

    * Nov stocks up 10.8 pct from Oct - survey
    * Output at 1.92 mln T, down 2.1 pct from Oct - survey
    * Exports estimated down 10.6 pct at 1.41 mln T - survey
    * Malaysian Palm Oil Board data due Dec. 10

    By Emily Chow
    KUALA LUMPUR, Dec 5 (Reuters) - Malaysia's palm oil stocks at end-November
are likely to touch the 3-million-tonne mark, their highest in recent years, as
the drop in exports outweighed leaner production, according to a Reuters survey.
    Based on the median estimate of eight planters, traders and analysts,
stockpiles are expected to jump 10.8 percent from the previous month to 3
million tonnes, their strongest levels in nearly 18 years, according to
Refinitiv data. MYPOMS-TPO
    Rising stockpiles could weigh on benchmark palm oil prices, which
are already trading at a three-year low on high inventories and slow demand. 
    Palm was last down 0.8 percent at 2,003 ringgit ($481.95) a tonne at the
midday break on Wednesday.
    Malaysian exports in November will touch 1.41 million tonnes, their lowest
in three months, a 10.6 percent drop compared with October, survey respondents
had forecast. MYPOME-PO
    "Stockpiles continue to build up as expected in Malaysia. The situation will
only get worse in the coming months due to Indonesia's removal of the export
levy. Malaysian crude palm oil and products are not competitive today," said a
Singapore-based trader.
    "With the U.S.-China trade ceasefire, Chinese crush will go up when Beijing
resumes U.S. soybeans imports, increasing the supply of soyoil and given the
winter season, demand for palm will remain subdued."
    Indonesia relaxed rules on palm oil levies and derivative products on
Wednesday following a drop in prices in a bid to help its farmers and boost
exports, as the move would make Indonesian palm more price competitive.

    Demand for palm oil generally tapers down in the last quarter of the year,
as colder temperatures in key markets such as China and Europe solidifies palm,
which stoke buyers to seek alternative oils. 
    Meanwhile, the poll showed November production declining 2.1 percent to 1.92
million tonnes, its first monthly decline in five months. MYPOMP-CPOTT
    "The projected 2 percent month-on-month fall in crude palm oil output for
November is lower than the historical average month-on-month decline of 9
percent in November over the past 10 years," said Ivy Ng regional head of
plantations research at CIMB Investment Bank, adding that estates in Sarawak had
posted the highest declines, followed by Peninsular Malaysia and Sabah.
    Malaysia's eastern states of Sarawak and Sabah are the top producing regions
of palm oil in the country. 
    Official palm oil data will be published by the Malaysian Palm Oil Board
‪after 0430 GMT on Dec. 10. 
    The median of forecast from the Reuters survey put Malaysia's consumption in
November at 319,464 tonnes. 
    
    Breakdown of November estimates (in tonnes): 
                         Range              Median
 Production      1,866,706 - 2,023,903     1,923,000
 Exports         1,380,000 - 1,533,681     1,405,000
 Imports            70,000 - 120,000        95,000
 Closing Stocks  2,976,935 - 3,098,674     3,015,927
 
* Official stocks of 2,722,391 tonnes in October plus the above estimated output
and imports give a total November supply of 4,740,391 tonnes. Based on the
median of exports and closing stocks estimate, Malaysia's domestic consumption
in November is estimated to be 319,464 tonnes.     


    ($1 = 4.1560 ringgit)

 (Reporting by Emily Chow; Editing by Sherry Jacob-Phillips)
  
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