KUALA LUMPUR Palm oil suppliers across Southeast Asia are struggling to cope with record output, with plantations delaying harvest and mills stalling on deliveries as storage tanks overflow, multiple industry sources said.
* High stocks, low prices could extend into 2019 - Malaysian
* Palm sees strongest daily gains in nearly 2 weeks
* Malaysian stocks rise to 3 mln T - MPOB
* Output falls for first time in five months - MPOB
* Palm oil's target zone of 1,956-1,972 rgt/T aborted -
(Updates with closing prices, quote)
By Emily Chow
KUALA LUMPUR, Dec 10 Malaysian palm oil futures
reversed earlier losses to close over 2 percent higher on
Monday, as official data showed falling output for the first
time in five months.
Data from industry regulator the Malaysian Palm Oil Board
(MPOB) showed stocks last month rose 10.5 percent from October
to 3.007 million tonnes, while production in November slid 6.09
percent from the previous month to 1.85 million tonnes.
Exports fell 12.9 percent to 1.375 million tonnes.
The benchmark palm oil contract for February delivery
on the Bursa Malaysia Derivatives Exchange was up 2.2
percent to 2,042 ringgit ($490.39) a tonne at the close of
trade, its strongest daily gains since Nov. 28.
Palm earlier hit a one week high of 2,049 ringgit.
Trading volumes stood at 34,798 lots of 25 tonnes each for
"The 3 million stocks has been factored in and now
production was down 6 percent," said a Singapore based trader,
referring to the MPOB data. "The seasonal slowdown in production
will start now."
Palm oil production typically falls in line with seasonal
trend at the year end, helping to reduce inventory levels.
Another trader added the market was seeing a technical
rebound after trading at three year lows.
In other related oils, the Chicago December soybean oil
contract was down 0.1 percent, while the January soybean
oil contract on the Dalian Commodity Exchange fell 2.3
Meanwhile, the Dalian January palm oil contract
declined 0.9 percent.
Palm oil is impacted by movements of other edible oils, as
they compete for a share in the global vegetable oil market.
A bearish target range of 1,956-1,972 ringgit per tonne has
been aborted for palm oil, said Wang Tao, a Reuters market
analyst for commodities and energy technicals.
Palm, soy and crude oil prices at 1102 GMT:
Contract Month Last Change Low High Volume
MY PALM OIL DEC8 2055 +42.00 1830 2055 4
MY PALM OIL JAN9 1959 +42.00 1901 1964 1460
MY PALM OIL FEB9 2042 +44.00 1985 2049 17564
CHINA PALM OLEIN JAN9 4144 -38.00 4118 4172 81140
CHINA SOYOIL JAN9 5172 -120.00 5170 5248 156292
CBOT SOY OIL JAN9 28.5 +0.00 0 0 24
INDIA PALM OIL DEC8 496.20 +3.70 489.50 498.5 782
INDIA SOYOIL DEC8 739.35 +0.95 735.5 740.5 7260
NYMEX CRUDE JAN9 51.69 -0.92 51.61 52.81 162492
Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
India soy oil in Indian rupee per 10 kg
Crude in U.S. dollars per barrel
($1 = 4.1640 ringgit)
($1 = 70.8500 Indian rupees)
($1 = 6.8733 Chinese yuan)
(Reporting by Emily Chow; Editing by Sai Sachin Ravikumar and
* 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 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
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
"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
"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.
"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):
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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* Oct stocks seen at 2.90 mln T, up 14.1 pct from Sept
* 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 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.
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
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
"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):
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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