October 7, 2019 / 4:41 AM / 16 days ago

PREVIEW-Malaysia Sept palm stocks set to snap six months of falls - survey

    * Sept stocks seen rising 11.9% to 2.52 mln T - survey
    * Output seen 4.6% higher at 1.91 mln T - survey
    * Exports seen down 19.4% to 1.40 mln T - survey
    * Malaysian Palm Oil Board data due Oct 10

    By Emily Chow
    KUALA LUMPUR, Oct 7 (Reuters) - Malaysian palm oil
stockpiles in September likely rose for the first time in seven
months, as production grew and export demand eased for the
edible oil, a Reuters survey showed.
    Inventories in the world's second-largest palm oil producer
are forecast to rise 11.9% from August to 2.52 million tonnes in
September, their highest in five months, according to a median
estimate of eight planters, traders and analysts polled by
Reuters. MYPOMS-TPO
    Higher stocks could put further pressure on benchmark palm
oil prices, which hit a more than one-month low at the
end of September. 
    Prices have been trading in a tight range since then, and
were last 0.6% higher at 2,161 ringgit ($515.63) at the midday
break on Monday.
    Stockpiles were largely expected to rise as exports slumped
for the first time in three months. Exports likely shrank by
19.4% to 1.40 million tonnes from a three-year high in the
previous month, as demand from markets such as India eased.
MYPOME-PO
    "We saw lower exports to India as they purchased more
refined oil from Indonesia instead due to the recent change in
duty structure," said a manager at a Malaysian plantation firm,
who declined to be named as he was not authorised to speak to
the media. 
    "Though September exports are lower month-on-month, they are
still considered good as August exports were the highest in
three years."
    India, the world's biggest edible oils importer, in
September raised the tax on refined palm oil from Malaysia to
50% from 45% for six months to curb imports and boost local
refining.
    Industry players had forecast that Indian demand for
Malaysian refined palm oil would drop sharply following the tax
hike, limiting further exports from the Southeast Asian country
and leading to higher inventories.
    Malaysian palm oil output likely rose in line with seasonal
trend, contributing to the gain in inventories and marking a
third straight month of gains in production. 
    The poll pegged September production at 1.91 million tonnes,
up 4.6% from the previous month and the highest in nearly a
year. MYPOMP-CPOTT
    "Fresh fruit bunch yields remain strong and growth is mainly
coming from East Malaysia estates," Ivy Ng, regional head of
plantations research at CIMB Investment Bank, said in a note. 
    Malaysia's eastern states of Sabah and Sarawak are the
country's top two producing regions of palm oil. 
    Official palm oil data will be published by the Malaysian
Palm Oil Board ‪after 0430 GMT on Oct. 10. 
    The median results from the Reuters survey put Malaysia's
consumption in September at 294,124 tonnes. 
    
    Breakdown of September estimates (in tonnes): 
                         Range              Median
 Production      1,860,000 - 1,980,000     1,906,313
 Exports         1,300,000 - 1,590,000     1,396,820
 Imports            30,000 - 70,000         52,800
 Closing Stocks  2,400,000 - 2,600,000     2,520,000
 
* Official stocks of 2,251,831 tonnes in August plus the above
estimated output and imports yield a total September supply of
4,210,944 tonnes. Based on the median of exports and closing
stocks estimate, Malaysia's domestic consumption in September is
estimated to be 294,124 tonnes. 

($1 = 4.1910 ringgit)

 (Reporting by Emily Chow; Editing by Subhranshu Sahu)
  
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