Malaysia end-Dec palm oil stocks smaller than expected as output plummets

KUALA LUMPUR, Jan 10 (Reuters) – Malaysia’s palm oil stocks at the end of December fell steeper than expected as production nosedived to its lowest in nine months, data from the nation’s palm oil board showed on Monday, further tightening inventories for 2022.

Stockpile at the world’s second largest producer fell 12.88% from November to 1.58 million tonnes, its smallest since July, according to the Malaysian Palm Oil Board (MPOB).

This was much lower compared to a Reuters’ poll estimating a stockpile of 1.73 million tonnes.

“It is a bullish report, we have a record local usage added with poor production numbers aggravated by flooding mainly in the east coast (of Malaysia),” said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.

Crude palm oil production, already hurt by a persistent labour shortage, slumped 11.26% to 1.45 million tonnes.

Exports fell 3.48% to 1.41 million tonnes while domestic consumption jumped 31% to 373,128 tonnes.

“Given the very tight inventories with lower production expected in February, it is likely the supply chain coverage will be hedged higher as restocking and Ramadan demand takes place,” Marcello Cultrera, institutional sales manager & broker at Phillip Futures in Kuala Lumpur.

Following is a breakdown of the Malaysian Palm Oil Board figures and Reuters estimates for December (volumes in tonnes) :

*indicates revised figures by the Malaysian Palm Oil Board

Reporting by Mei Mei Chu; Editing by Martin Petty

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