KUALA LUMPUR- Malaysia’s palm oil inventories are likely to have dropped in January to their lowest levels in nearly two years, as adverse weather disrupted production, although lower exports offset some of the decline, a Reuters survey showed on Wednesday.
Palm oil stocks are expected to have fallen to 1.65 million metric tons, a 3.45 percent decline from December levels, according to a median estimate of 10 traders, planters, and analysts polled by Reuters. This will be a fourth consecutive month of decline in palm oil reserves.
Crude palm oil output is forecast to have declined to 1.32 million metric tons in January, an 11 percent drop from the previous month, marking the fifth consecutive month of lower production. This would bring output to its lowest level in nearly a year.
“The decline in stocks is directly linked to the fall in production so the market is expecting close to 13 percent to 15 percent drop in January’s output due to heavy rains and floods in the country,” said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
