Malaysia’s palm oil inventories at the end of March shrank for a fifth consecutive month as a larger-than-expected rise in exports and plunge in imports outweighed strong production growth, Malaysian Palm Oil Board (MPOB) data showed on Monday. Stockpiles in the world’s second-largest producer fell 2.99% from February to 1.47 million tonnes, the lowest since March 2021, according to MPOB data. Overall demand rose nearly three times faster than supply, erasing stocks, said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics. Crude palm oil production expanded for the first time since October helped by better weather, exceeding expectations with a 24% monthly rise to 1.41 million tonnes. Exports rose 14.1% to 1.27 million tonnes, recording a three-month peak as buyers looked to replace missing sunflower oil supplies after Russia’s invasion of Ukraine halted shipments from the key Black Sea region.
Imports plummeted 43% to 84,871 tonnes.
“An increase in local usage reflects better post-pandemic consumption patterns, which eventually will remain elevated throughout the year,” said Paramalingam Supramaniam, director at Pelindung Bestari, a brokerage based in Malaysia. However, scant attention is being paid to April production which remains an anomaly in the second quarter, with many producers and planters recording a double-digit decline for the first 10 days of April, he added.