Malaysia palm oil stocks set for first drop since June
SINGAPORE, Feb 7 — Lower production likely helped Malaysian palm oil stocks to ease in January from a record-high in the previous month, a Reuters survey of five plantation companies showed today.
Inventory level could have fallen 2.9 per cent to 2.55 million tonnes in January from December’s all-time high of 2.63 million tonnes. This would be the first decline since June last year, as slowing production allowed exports to help ease stocks.
Palm oil output in the world’s second-largest producer may have slid 15.1 per cent to 1.51 million tonnes as production entered a seasonally slower phase.
Exports of the edible oil probably eased 9.7 per cent from a month ago to 1.49 million tonnes, as worries persisted over the first half of January that cargoes would not meet China’s stricter edible oil regulation. Shipments to Europe also slowed as the tropical oil tends to solidify in winter.
Imports of crude palm oil from top producer Indonesia are likely to have grown to 80,000 tonnes from 54,716 tonnes the month before, according to the poll.
Malaysia, the world’s No.2 palm oil producer, announced that its crude palm oil export tax for February will be kept at zero per cent, as average prices stayed below the lowest reference price at RM2,250 per tonne.
Top rival Indonesia increased its export tax for crude palm oil to 9 per cent for February from 7.5 per cent in the previous month, and raised tax for refined palm olein to 3 per cent from 2 per cent.
Traders were relieved after China’s quarantine authorities allowed discharge of two Malaysian palm oil cargoes in late January, the first this year after the country imposed stricter quality requirements on imported edible oils.
India slapped a 2.5 per cent import duty on crude edible oils in mid-January in a bid to stem overseas purchases, although market participants said the tax was smaller than expected and not drastic enough to hurt demand.
But leading industry analyst Dorab Mistry told Reuters in an interview that India, the world’s largest vegetable oil buyer, may raise import duties on edible oils again this year, with the government looking to protect domestic oilseed farmers as inflation slows.
The benchmark third-month contract on the Bursa Malaysia Derivatives Exchange edged up 4.9 per cent in January, the steepest gain since March 2012, on concern that South American dry weather may hurt soybean production.
But palm oil prices may still post a second straight year of declines in 2013 on strong output from top producers Indonesia and Malaysia and record stocks, a Reuters survey of 28 analysts showed.
Global edible oil importers are likely to increase purchases of low-priced palm oil in coming months, turning away from soyoil and other more expensive seed-based oils, Hamburg-based oilseeds analysts Oil World said. — Reuters