KUALA LUMPUR- Malaysia’s palm oil inventories are forecast to rise in April, for a second consecutive month, as the industry approaches peak production season with the second half of the year expected to bring in significant output increases, a Reuters survey showed on Monday.
Palm oil stocks are expected to have increased to 1.79 million metric tons, up 14.8 percent from March, according to a median estimate of ten traders, planters, and analysts polled by Reuters. This represents the highest inventory level since December last year.
Crude palm oil output likely climbed to 1.62 million metric tons, a 16.9 percent increase from the previous month and the second consecutive monthly gain. Production will be at its highest since November last year.
“We are currently at the trajectory of peak production months, and the second half of the year will see a significant increase in production,” said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
As such, Paramalingam said, it is crucial that exports remain robust as any severe dip in exports will lead to a huge increase in stocks.
Exports of palm oil products are forecast to rise by 9.7 percent to 1.1 million metric tons, a second straight monthly increase, the survey showed.
