Palm stocks in Malaysia at the end of June hit their highest level in 9 months as production and imports increase

KUALA LUMPUR, July 12 (Reuters) – Malaysia’s palm oil stocks hit a nine-month high of 1.61 million tonnes at the end of June, with higher production and imports offsetting a sharp rebound of exports, according to data from the industry regulator Malaysian Palm Oil Board (MPOB) aired on Monday.

Inventories of the world’s second-largest producer rose 2.82% in one month to reach their highest level since last September, according to data from MPOB. MYPOMS-TPO

Crude palm oil production rose 2.21% to 1.61 million tonnes from May, up for the fourth consecutive month. MYPOMP-CPOTT

Planters have been scrambling to harvest bulk oil palm fruit to increase yield amid the peak production season, but production remains constrained by a labor shortage that has been exacerbated by closures of borders induced by the pandemic.

The data showed that production was growing at a slower pace compared to production growth estimates of 3-6%, while demand was in line with market expectations, said Marcello Cultrera, director of institutional sales and brokerage at Phillip Futures in Kuala Lumpur.

Exports in June jumped 11.84% to 1.42 million tonnes, after falling 6% the previous month, according to MPOB data.

Imports rose 27% from May figures, much more than expected and an indication that the market is tight, according to analysts and traders.

Domestic consumption fell by 38%. It is expected to drop after the Ramadan festival and the COVID-19 restrictions have also hurt consumption, said Anilkumar Bagani, head of research at Mumbai-based vegetable oil broker Sunvin Group.

A Reuters survey predicted a 7.5% increase in inventories from the end of May to 1.69 million tonnes, production up 7% and exports up 10%.

Here’s a breakdown of Malaysian Palm Oil Board figures and Reuters estimates for June (volumes in tonnes):

* Indicates figures revised by the Malaysian Palm Oil Board

Reporting by Mei Mei Chu; Editing by Muralikumar Anantharaman and Sherry Jacob-Phillips

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