Malaysia’s palm oil stocks at end-December expected to hit 13-year low as production declines

KUALA LUMPUR (Reuters) – Malaysia’s palm oil stocks likely fell in December to their lowest level in more than 13 years, as edible oil production fell for a third consecutive month as exports fell jumped, according to a Reuters investigation.

According to a median estimate of eight growers, traders and analysts polled by Reuters, stocks of the world’s second-largest producer fell 22% from the previous month to 1.22 million tonnes, the smallest since June 2007.

Production likely fell 11% to 1.33 million tonnes, its lowest level since February, while exports are believed to have increased 15% to 1.5 million tonnes after a strong decline in November.

Malaysia’s benchmark crude palm oil futures rose 18% in 2020 to average an average of 2,700 ringgit ($ 674.33) per tonne, marking their second consecutive annual gain, with supplies shrinking. drying up due to adverse weather conditions as demand remained firm.

Harvesting and productivity in Malaysia’s palm plantations dependent on foreign workers were hampered last year, as the government banned the entry of migrant workers until the end of 2020 to stem the coronavirus outbreak.

“The market in January will observe government interaction on the labor moratorium and the likelihood of rehiring Indonesian workers,” said Marcello Cultrera, director of institutional sales and brokerage at Phillip Futures in Kuala Lumpur.

The Malaysian Palm Oil Board will release official data for December on January 11.