Malaysia’s palm oil inventories at the end of January likely ticked up for the first time in four months, as a deep plunge in exports offset output which tumbled to near five-year low, a Reuters survey showed on Friday.
Stockpiles in the world’s second largest producer is seen rebounding 1.75% from the previous month to 1.29m tonnes, according to a median estimate of 11 planters, traders and analysts polled by Reuters.
Production, which has been suffering from flooding in parts of Malaysia and an acute labour shortage, is forecast to nosedive 13% to 1.16m tonnes, its lowest since February 2016.
Exports is pegged to slump 35% from January to 1.06m tonnes, their smallest since February 2015, as shipments to the biggest buyers India and China slowed.
This was because traders front-loaded their crude palm oil (CPO) exports in December ahead of Malaysia reinstating the export tax in January, said Ivy Ng, regional head of plantations research at CGS-CIMB Research, in a note.
A drop in imports, after hitting multi-year highs in December, will be the main deterrent for stockpiles to rise, said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.
Imports were seen down 61% to 110,000 tonnes.
"We believe prices will remain supported in the first quarter of 2021, underpinned by tight stock levels, concerns over CPO production given the weather uncertainties and strong prices of other edible oils," Affin Hwang Capital said in a note.
The Malaysian Palm Oil Board will release the official data on February 10.