November 5, 2018 / 5:11 AM / 13 days ago

PREVIEW-Malaysia Oct palm oil stocks seen rising to 3-year high

    * Oct stocks seen at 2.90 mln T, up 14.1 pct from Sept
-survey
    * Output at 1.96 mln T, up 5.7 pct from Sept -survey
    * Exports estimated down 13 pct at 1.41 mln T -survey
    * Malaysian Palm Oil Board data due Nov. 12

    By Emily Chow
    KUALA LUMPUR, Nov 5 (Reuters) - Malaysia's palm oil stocks
at end-October are forecast to rise to the highest in three
years at nearly 3 million tonnes amid a seasonal rise in output
and a slip in export demand, according to a Reuters survey.
    Inventories are expected to climb for a fifth straight
month, rising 14.1 percent from September to 2.90 million
tonnes, based on the median estimate of eight planters, traders
and analysts. That would be the highest level since November
2015, and the sharpest monthly gain in a year. MYPOMS-TPO
    Rising stockpiles could put further pressure on benchmark
palm oil prices, which hit a three-year low last week.
Palm was last trading down 0.7 percent at 2,139 ringgit
($513.32) a tonne at the midday break on Monday.
    "The high inventory levels are attributed to the lack of
demand from major buyers," said a researcher at a Malaysian
plantations company, referring to India, the world's largest
palm oil buyer, and China. 
    Survey respondents expected exports to fall 13 percent to
1.41 million tonnes in October due to competition from cheaper
Indonesian shipments and a weak Indian rupee, which has
shed nearly 8 percent since end-June, making imports more
costly.
    Malaysian shipments to India fell more than 20 percent in
October, according to cargo surveyor Intertek Testing Services,
while another cargo surveyor, Societe Generale de Surveillance,
put the fall at 63 percent.  
    Chinese demand typically tapers off in the last quarter of
the year as colder winter temperatures can solidify palm oil,
leading buyers to seek alternatives.
    The survey pegged October production at 1.96 million tonnes,
up 5.7 percent from the previous month to its highest level in a
year. MYPOMP-CPOTT
    "We gather there has been a change in cropping patterns this
year, which leads me to believe the peak (output) will likely
take place in November," said Lavis Chong, a plantations analyst
at Kenanga Research in Kuala Lumpur. 
    "End-stocks are likely to be on the rise through November
and December as a result, until a possible reversal in January
along with seasonal production slowdown." 
    Palm oil production typically rises during the third and
fourth quarters, and has tended to peak between August and
October in recent years.
    Official palm oil data will be published by the Malaysian
Palm Oil Board ‪after 0430 GMT on Nov. 12. 
    The median of forecasts from the Reuters survey put
Malaysia's consumption in October at 275,854 tonnes. 
    
    Breakdown of October estimates (in tonnes): 
                         Range              Median
 Production      1,909,272 - 1,965,000     1,960,000
 Exports         1,375,897 - 1,470,000     1,408,298
 Imports            61,940 - 125,000        82,500
 Closing Stocks  2,805,768 - 2,940,000     2,899,500
 
* Official stocks of 2,541,152 tonnes in September plus the
above estimated output and imports give a total October supply
of 4,583,652 tonnes. Based on the median of exports and closing
stocks estimate, Malaysia's domestic consumption in October is
estimated to be 275,854 tonnes.     


($1 = 4.1670 ringgit)

 (Reporting by Emily Chow; editing by Richard Pullin)
  
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