Malaysia’s palm oil inventories fell 6.3% at end-June from a month earlier as an increase in exports amid an easing of coronavirus curbs outpaced an unexpected jump in production, official data showed on July 10.
Stockpiles at the world’s second largest producer eased to 1.90 million tons, according to data from industry regulator the Malaysian Palm Oil Board (MPOB).
Crude palm oil production last month rose to a 20-month high, growing 14.2% from May to 1.89 million tons, the MPOB data showed, the highest since October 2018.
Production was 2-5% higher than estimates for June and stronger production is expected to continue during Q3.
June palm oil exports, including crude and processed palm oil, surged 24.9% from May to 1.71 million tons, as countries restock on the edible oil after lockdowns were imposed to curb the spread of the coronavirus. However, traders expect the pace of exports to slow down in July.
Benchmark crude palm oil prices are expected to hold between 2,200 ringgit and 2,500 ringgit for the rest of 2020. However, the fear of a second wave of COVID-19 could cause further economic stress on the global economy and could limit upward price movement.