Palm oil inventories in the world's second-largest producer increased 0.06% from the previous month to 1.7 million tonnes, marking the first monthly gain since April, according to data from industry regulator the Malaysian Palm Oil Board (MPOB). [MYPOMS-TPO]
The rise was lower than a Reuters' survey pegging a 5.4% increase, and may provide further support to the benchmark palm oil futures contract, which has gained 3% so far this month. [POI/]
August imports were at a 27-month low and contributed to the smaller stockpiles, said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.
Imports fell 39% from July to 32,311 tonnes, while domestic consumption rose 12.6% to 312,591 million tonnes.
Crude palm oil output rose 3.07% to a two-month high of 1.86 million tonnes, as plantations entered the seasonal peak production period. [MYPOMP-CPOTT]
"Production is now slowly recovering at both Malaysia and Indonesia," said Marcello Cultrera, institutional sales manager and broker at Phillip Futures in Kuala Lumpur.
Exports slumped 11.3% to 1.58 million tonnes, the lowest since May, as top buyers India and Europe reduced purchases. [MYPOME-PO]
Shipments to India, the world's largest edible oil consumer, fell 27%, while those to Europe declined 7%.
Meanwhile, cargo surveyors estimated exports during the first 10 days of September jumped 10% from a month earlier.
"With September exports emerging positive... prices could see a recovery to 2,900 ringgit for the most active contract," Varqa said.
The market will now wait for September production numbers for further price direction, said a Kuala Lumpur-based trader.
Following is a breakdown of the Malaysian Palm Oil Board figures and Reuters estimates for August (volumes in tonnes):
Aug. 2020 Aug. 2020 poll July 2020* Aug 2019
Output 1,862,962 1,843,903 1,807,397 1,821,548
Stocks 1,699,106 1,790,000 1,698,036 2,240,523
Exports 1,581,612 1,533,000 1,783,284 1,735,645
Imports 32,311 50,000 52,691 51,055
*indicates revised figures by the Malaysian Palm Oil Board
By Mei Mei Chu