October 5, 2018 / 7:57 AM / 2 months ago

PREVIEW-Malaysia palm oil stocks seen edging down from 7-mth high

    * Sept stocks seen at 2.47 mln T, down 0.7 pct from Aug
-survey
    * Output at 1.86 mln T, up 14.7 pct from Aug -survey
    * Exports estimated up 50 pct at 1.65 mln T -survey
    * Malaysian Palm Oil Board data due Oct. 10

    By Emily Chow
    KUALA LUMPUR, Oct 5 (Reuters) - Malaysia's palm oil stocks
likely edged down in September from seven-month highs in August
as shipments from the world's No.2 exporter of the commodity
outpaced production-growth for the month, according to a Reuters
survey.
    Easing stockpiles would support benchmark palm oil prices,
which this week rose from three-month lows to stand at 2,231
ringgit ($538.24) during Friday's midday break.
    September inventories are expected to have dropped 0.7
percent from the month before to 2.47 million tonnes, according
to the median estimate of eight planters, traders and analysts
surveyed by Reuters. MYPOMS-TPO
    The dip in stockpiles was largely attributed to a surge in
exports, which were estimated to have jumped 50 percent from
August to 1.65 million tonnes, potentially marking what would be
the highest level in over two years and the sharpest monthly
jump since October 2006. MYPOMP-CPOTT
    That comes after cargo surveyors reported on Monday that
Malaysia's palm oil exports rose between 49 percent and 54.6
percent in September.
    Respondents in the Reuters survey said exports were boosted
after the country in September cut its crude palm oil export tax
to zero from 4.5 percent in August, as well as being stoked by
good seasonal demand from top importer India ahead of its Diwali
celebration in early November. 
    Malaysia is keeping the export tax at zero for
October.
    "October's exports will also be as good because market
prices are likely to have bottomed out already. It will be time
to stock up for key markets," said a trader based in east
Malaysia. 
    Leading analysts at an industry conference last week said
palm prices would trade around 2,100-2,200 ringgit for the rest
of the year, before rising in 2019 as production tapers off in
line with seasonal trends.
    The survey pegged September's output to rise 14.7 percent
from August to 1.86 million tonnes. That would the strongest
production since November and the highest September levels since
2015. MYPOMP-CPOTT 
    "We're expecting a late uptick in production this year,"
said a Singapore based trader, adding that Malaysian output
should peak in November.
    Production typically rises in line with seasonal trends in
the third and fourth quarters of the year, and has usually
peaked between August and October in recent years.
    Official palm oil data will be published by the Malaysian
Palm Oil Board ‪after 0430 GMT on Oct. 10. 
    The median figures from the Reuters survey put Malaysia's
consumption in September at 304,732 tonnes. 
    
    Breakdown of September estimates (in tonnes): 
                         Range              Median
 Production      1,768,493 - 1,880,000     1,861,500
 Exports         1,220,560 - 1,759,333     1,649,500
 Imports            50,000 - 100,000        75,019
 Closing Stocks  2,350,000 - 2,798,542     2,471,000
 
* Official stocks of 2,488,713 tonnes in August plus the above
estimated output and imports give a total September supply of
4,425,232 tonnes. Based on the median of exports and closing
stocks estimate, Malaysia's domestic consumption in September is
estimated to be 304,732 tonnes.     


($1 = 4.1450 ringgit)

 (Reporting by Emily Chow; Editing by Joseph Radford)
  
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