KUALA LUMPUR, Dec 5 — Malaysian palm oil stocks likely hit
another record high in November as exports failed to keep pace with
output, a Reuters survey of five plantation firms showed today,
potentially weighing on prices.
Inventory in the world’s No. 2 palm oil producer may have
grown 2.8 per cent to 2.58 million tonnes from a previous record of 2.51
million tonnes seen in October as output stayed high despite a slight
weakening in yields, according to the poll.
Malaysia’s palm
oil output in November may have dropped 5 per cent to 1.84 million
tonnes from a month ago as heavy rains disrupted some harvesting and
yields tapered off after months of strong growth.
But that was still enough to offset exports at 1.70
million tonnes, down 3.3 per cent from a month ago as there was a lack
of vessels to transport the tropical oil to big consumers in India,
China and Europe.
Imports of crude palm oil from top producer Indonesia
likely surged more than two fold to 50,000 tonnes in November, from
19,102 tonnes the month before, as Malaysian refiners took advantage of
lower Indonesian prices to stock up.
Factors to watch
In December, Malaysian palm oil firms holding tax-free
export quota for the crude grade will be rushing to push out shipments
before the allocations expire in end-December.
That means Malaysian stocks are unlikely to hit three million tonnes by end-2012 as forecast by industry analyst Dorab Mistry.
It also means there could be a stock drawdown in December,
the first monthly drop since June this year, giving much needed support
to palm oil futures that are set to post their weakest yearly
performance since the financial crisis in 2008.
The benchmark February contract on the Bursa Malaysia
Derivatives Exchange has shed about 27 per cent so far this year, while
in 2008 it dropped 44 per cent.
Malaysia this month is also set to announce its crude palm
oil export tax for January 2013, expected to be lower than the current
23 per cent duty. Lower export taxes for the grade are likely to boost
shipments, further eating into stocks.
Another factor to watch would be Chinese buying.
Buyers from China, the world’s second largest importer of
palm oil, are likely to snap up refined palm oil cargoes before stricter
quality measures set by Beijing take effect on January 1.
Malaysian output is expected to decline further as
seasonally heavy rains towards the end of the year disrupt harvesting
and trigger floods that complicate logistics.
Breakdown of November estimates (in tonnes):
Range Median* Production 1,822,124 - 1,870,000 1,841,509
Exports 1,600,000 - 1,705,310 1,700,000 Imports 22,922 - 100,000 50,000
Closing stocks 2,528,000 - 2,625,000 2,580,000 * Median for closing
stocks based on estimated exports of 1,686,000 tonnes and domestic
consumption of 120,153 tonnes subtracted from 4,400,153 tonnes, the
total of November’s estimated production, imports and official opening
stocks. — Reuters
"The liberalisation of the services sector is pursued with
the view of creating a conducive business environment to attract investments,
technologies and higher value employment opportunities," Prime Minister Najib
Abdul Razak told journalists.