By Ashley Tang and Rajendra Jadhav
KUALA LUMPUR/MUMBAI (Reuters) – Malaysia’s palm oil stocks fell for a third straight month in December to hit their lowest level since May 2023, as output fell due to flooding, data from the industry regulator showed on Friday.
A drop in inventories in the world’s second-largest palm oil producer after Indonesia could support benchmark futures, which have corrected sharply in recent weeks after rising to their highest level in about 2-1/2 years in November.
Palm oil stocks in Malaysia at the end of December fell 6.91% from the previous month to a 19-month low of 1.71 million metric tons, data from the Malaysian Palm Oil Board (MPOB) showed.
Crude palm oil production fell 8.3% to 1.49 million tonnes, the lowest since March 2024, while palm oil exports fell 9.97% to a six-month low of 1.34 million tonnes.
A Reuters survey had forecast inventories at 1.76 million tonnes, production at 1.48 million tonnes and exports at 1.38 million tonnes. [PALM/POLL]
MPOB data for December is slightly positive for the market, as inventories fell more than forecast due to a pick-up in local consumption, said Anilkumar Bagani, head of research at Mumbai-based vegetable oil broker Sunvin Group.
Palm oil consumption in Malaysia jumped 53% in December from the previous month to 309,865 tonnes, data showed.
Palm oil has been trading at a premium to rival soybean and sunflower oils and needs to be corrected to attract demand from price-sensitive buyers, a Mumbai-based trader with a global trading house said.
“Even in January, exports are likely to remain muted,” the trader said.
The following is a breakdown of figures from the Malaysian Palm Oil Board and Reuters estimates for December (quantities in tonnes)[PALM/POLL]:
December December 2024 November December
Survey 2024 2024 2023
Output 1,486,786 1,483,000 1,621,294 1,550,796
Shares 1,708,747 1,755,000 1,835,641* 2,290,793
Export 1,341,732 1,375,000 1,490,293* 1,362,145
Import 37,917 22,500 22,081 40,062
*denotes revised figures from the Malaysian Palm Oil Board
