Written by Ashley Tang and Rajendra Jadhav
KUALA LUMPUR/MUMBAI (Reuters) – Malaysian palm oil inventories fell for a third straight month in December, reaching their lowest levels since May 2023, with production held back by floods, data from the industry regulator showed on Friday.
Lower inventories in the world's second-largest palm oil producer after Indonesia could support benchmark futures, which have corrected sharply in recent weeks after rising to their highest levels in about 2-1/2 years in November.
Malaysian palm oil inventories at the end of December fell 6.91% from the previous month to a 19-month low of 1.71 million metric tons, data from the Malaysian Palm Oil Board (MPOB) showed.
Crude palm oil production fell 8.3% to 1.49 million tons, the lowest level since March 2024, while palm oil exports fell 9.97% to a six-month low of 1.34 million tons.
A survey conducted by Reuters expected stocks to reach 1.76 million tons, production 1.48 million tons, and exports 1.38 million tons. (palms/reconnaissance)
Anilkumar Bhajani, head of research at Mumbai-based vegetable oil brokerage Sanaeen Group, said the MPOB data for December was somewhat positive for the market, as inventories fell more than expected due to higher domestic consumption.
The data showed that palm oil consumption in Malaysia jumped by 53% in December compared to the previous month to reach 309,865 tons.
Palm oil is trading at a higher price than competing soybean and sunflower oils and needs a correction to attract demand from price-sensitive buyers, a Mumbai-based trader with a global trading house said.
“Even in January, exports are likely to remain weak,” the trader said.
Below are details of the Malaysian Palm Oil Board figures and Reuters estimates for December (volumes in tonnes) (PALM/POLL):
December December 2024 November December
Referendum 2024 2024 2023
Outputs 1,486,786 1,483,000 1,621,294 1,550,796
Inventory 1,708,747 1,755,000 1,835,641* 2,290,793
Exports 1,341,732 1,375,000 1,490,293* 1,362,145
Imports 37,917 22,500 22,081 40,062
*Refers to figures adjusted by the Malaysian Palm Oil Board
