Huitong Finance APP News-Malaysia’s palm oil stocks fell to the lowest level in 10 months at the end of March as export growth offset the impact of the rebound in production, the Malaysian industry regulator said on Monday.
Malaysia is the second largest palm oil producer in the world after Indonesia, and its inventory reduction will help support the benchmark FCPOc3, which rose to the highest level in a year earlier this month.
According to the data of Malaysian Palm Oil Bureau (MPOB), as of the end of March, Malaysian palm oil stocks decreased by 10.68% from the previous month to 1.71 million metric tons, the lowest level since May.
According to MPOB, palm oil (CPO) production increased by 10.57% to 1.39 million tons, while palm oil export increased by 28.61% to 1.32 million tons.
The agency survey predicted that the inventory in March was 1.79 million tons, down 6.65% from last month, the output was 1.38 million tons, and the export was 1.23 million tons.
Anilkumar Bagani, research director of vegetable oil broker Sunvin Group, said,MPOB’s report is beneficial to the market. The original palm oil inventory is rapidly consuming, and it may further decline by the end of April. In the first half of April, due to the Ramadan holiday, Malaysia’s crude palm oil production may decline, but the export volume is higher than last month.
According to MPOB data, the crude palm oil inventory fell to 797,974 tons at the end of March, the lowest level since March 2022.
A trader based in New Delhi said,Palm oil exports may be under pressure as soybean oil exports from South America will increase in the coming months. This is because the trading price of soybean oil is lower than that of palm oil, which will still limit the price of palm oil despite the decline in stocks.
Palm oil is affected by the price trend of related oils because of competing for the share of global vegetable oil market.
The change of crude oil price will directly affect the price of palm oil. When the price of crude oil rises, the production cost of palm oil will also rise, which will lead to an increase in the price of palm oil, and vice versa. In addition, because palm oil is an energy source that can replace crude oil, when the price of crude oil rises, some consumers may turn to palm oil, which will lead to an increase in demand and price of palm oil.
Therefore, the relationship between palm oil futures and is very close. Investors need to pay close attention to the changes of crude oil prices and the supply and demand of palm oil in the international market to judge the trend of palm oil futures.
Palm oil analyst Imran Eshak said,Ramadan has slowed down the recovery of production in palm areas and promoted exports. Palm oil stocks are low and supply is tight. Prices are still expected to remain strong. It is expected that in April, the March futures contract price of horse palm oil will be traded in the range of 3,950 to 4450l L.
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