Highlight Malaysia May palm oil inventory up 4.2% on month, beats forecast

by **Cals** Wed 11 Jun 2014, 01:54

Highlight Malaysia May palm oil inventory up 4.2% on month, beats forecast

Business & Markets 2014

Written by Chong Jin Hun of theedgemalaysia.com

Tuesday, 10 June 2014 13:30

KUALA LUMPUR (June 10): Malaysian palm oil inventory rose 4.2% to 1.84 million tonnes in May 2014 from 1.77 million tonnes in the preceding month (April 2014), according to the Malaysian Palm Oil Board (MPOB).

MPOB said in a statement on its website today that crude palm oil (CPO) production climbed 6.5% to 1.7 million tonnes from 1.6 million tonnes. Palm oil exports increased 10.74% to 1.4 million tonnes from 1.3 million tonnes.

The May palm oil inventory and export growth rates surpassed market forecast.

Reuters reported that the median forecast from six traders, planters and analysts pegged Malaysian palm stocks at 1.81 million tonnes at end-May, up 2.4% from April and at their highest in four months.

Exports were forecast at 1.36 million tonnes, up 8% from April. May's palm output was seen rising 7.1% to 1.67 million tonnes.

CPO prices have fallen due a stronger ringgit and weakness in rival soybean prices.

CPO for August 2014 delivery changed hands at RM2,399 a tonne today, down from RM2,837 on March 10, 2014.

Reuters reported that despite forecasts of a high possibility that the El Nino weather condition will return this year, planters and traders expect minimal damage to palm crops for now, although they do not rule out that prices could rebound if there is a severe drought.

El Nino - a warming of sea temperatures in the Pacific, affects wind patterns and can cause extreme dry weather in one part of the world while drenching other regions.