Malaysia end-Sept palm oil stocks mark first gain in 7 months
Inventories in the Southeast Asian nation rose 9.3% from August to 2.4 million tonnes, their highest in five months, after snapping six months of consecutive declines, data from the Malaysian Palm Oil Board (MPOB) showed. <MYPOMS-TPO>
Higher stockpiles could dampen benchmark palm oil prices, which hit a two-month low at the end of September. Prices were last up 0.4% at 2,205 ringgit ($526.06) a tonne by the midday break on Thursday. [POI/]
Exports in September dropped 18.8%, after rising for two consecutive months to a three-year top of 1.4 million tonnes. <MYPOME-PO>
Traders attributed the decline in exports to lower demand from India, after the world's largest palm oil importer raised the tax on refined palm oil from Malaysia to 50% from 45% for six months from September to curb imports and boost local refining.
"Demand in the fourth quarter will be slower than usual, especially as Indonesian prices are more competitive," said a Kuala Lumpur-based trader.
"Therefore, stocks should continue to build until November."
Palm stockpiles rose along with higher production in September. Output increased by 1.2% to 1.8 million tonnes to its strongest in 10 months, but came in lower than expected. <MYPOMP-CPOTT>
"Production is lower than market expectations. This is due to persistent dry weather and a longer-than-usual haze in major palm oil-producing areas, coupled with less working days in September which resulted in lower production," said Anilkumar Bagani, research head of Sunvin Group, a Mumbai-based vegetable oil broker.
"Output is likely to increase a little towards peak production, but not by much."
An industry analyst last month forecast that Malaysian palm oil inventories would rise to 2.5 million-2.6 million tonnes by December, while an official from the MPOB said inventories may fall to 2 million tonnes by year-end.
A Reuters survey had forecast palm oil stockpiles at the end of September to rise by 11.9% to 2.52 million tonnes. Production was seen gaining 4.6% to 1.91 million tonnes, and exports were seen falling 19.4% to 1.40 million tonnes.
(Reporting by Emily Chow; Editing by Tom Hogue and Sherry Jacob-Phillips)
By Emily Chow