Stockpiles declined 0.66% from December to 2.18 million tonnes, according to the median estimate of 11 planters, traders and analysts polled by Reuters.
Production plunged 14.1% to 1.39 million tonnes, the lowest in nearly a year, as harvesting in the world's second-largest producer was disrupted by tropical storms and floods.
Exports slumped 21.7% to 1.15 million tonnes due to slowing shipments to largest consumers India and China. Imports were seen 8.3% higher.
Analysts said demand is expected to ramp up in the coming months as buyers stock up ahead of the Islamic holy month of Ramadan, which is capped by the Eid al-Fitr holiday. Ramadan is expected to begin on March 22.
With declining production and pent-up Ramadan demand, Malaysian palm oil stocks are expected to decline towards 1.9 million tonnes by the end of the first quarter, said Nagaraj Meda, managing director at TransGraph Consulting.
"We expect prices to stay supported above 3,600 ringgit ($845.86) a tonne and trade higher towards 4,500 ringgit ($1,057.33) a tonne in the coming months," he said, adding that Indonesia's B35 biodiesel programme and South American edible oil production would remain key factors.
The Malaysian Palm Oil Board will release its data on Feb 10.
Breakdown of January estimates (in tonnes):
Range Median
Production 1,327,459-1,650,000 1,390,000
Exports 1,028,000-1,450,000 1,150,000
Imports 0-100,000 51,000
Closing stocks 2,114,000-2,401,000 2,180,301
* Official stocks of 2,194,809 tonnes in December plus the above estimated output and imports yield a total January supply of 3,635,809 tonnes. Based on the median of exports and closing stocks estimate, Malaysia's domestic consumption in January is estimated to be 305,508 tonnes.
($1 = 4.2560 ringgit)
(Reporting by Mei Mei Chu; Editing by Kanupriya Kapoor)
By Mei Mei Chu
