SINGAPORE, Nov 6 (Reuters) - Seasonally strong production may have driven Malaysian palm oil stocks to another record high in October, a Reuters survey of five plantation firms showed on Tuesday.
Inventory levels in the world's No.2 palm oil producer may have grown by 7.5 percent in October to 2.67 million tonnes from a previous peak of 2.48 million tonnes marked in September, according to the poll.
Output most likely stood at 1.96 million tonnes, a slight drop from September's record 2 million tonnes, although respondents said that was still strong enough to boost stocks for the fourth straight month.
Palm oil production typically peaks in September and October. P roduction in October 2011 stood at 1.91 million tonnes.
Shipments probably edged up by 12 percent to 1.69 million tonnes in October, the highest seen so far this year, largely due to a rise in European demand for the vegetable oil.
Imports of crude palm oil from top producer Indonesia were expected to reach 37,500 tonnes in August, respondents said.
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Malaysia announced last month that it would scrap a tax-free export quota and reduce export taxes for the crude grade from 2013, in a step that could make feedstock prices cheaper for refiners.
It has taken more than a year for the country to respond to top producer Indonesia's move in September 2011 to cut its own export taxes for refined palm oil to boost margins and lure investment.
For now, stocks in Malaysia could remain high as producers continue to face stiff competition from Indonesia, which cut its export taxes even further for November.
Indonesia sets its export tax every month, and its November taxes for crude palm oil and refined palm olein stood at 9 and 3 percent respectively, down from October's 13.5 and 6 percent.
Rising European demand could continue to support Malaysian exports, as steep falls in palm oil prices are making it more attractive than other vegetable oils for use in biodiesel production.
Benchmark Malaysian palm oil futures FCPOc3 fell to a near 3-year low at 2,230 ringgit ($729) per tonne on Oct. 3, and have lost almost one-fourth so far this year.
Palm oil prices are likely to rise sharply in coming months on brisk buying interest as global importers seek cheaper alternatives to more expensive products including soyoil, Hamburg-based oilseeds analysts Oil World said late last month.
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