KUALA LUMPUR, Jan 11, 2021, Reuters. Malaysian palm oil inventories in December fell to their lowest in more than 13 years and imports touched a record high as production slumped while exports surged, data from the industry regulator showed on Monday, Reuters reported.
According to Malaysian Palm Oil Board (MPOB), palm oil end-stocks in the world’s second-largest producer slumped 19% in December to 1.26 million tonnes on-month – the lowest since July 2007 when the country reported stocks of 1.31 million.
Palm oil exports surged 24.7% to 1.62 million tonnes and crude palm oil production fell 10.6% to 1.33 million tonnes, while imports rose to a record 282,058 tonnes, up from 112,663 tonnes in the previous month.
A Reuters poll had pegged December inventories to fall 12% to 1.22 million. Production was seen down 11%, while exports were seen rising 15%.
Exports were expected to rise in December, after which there will be no export tax exemption on palm oil products. The duty exemption gave Malaysian crude palm oil a competitive price advantage over rival Indonesian crude palm oil, but eroded refiners’ margins.
Malaysian stocks are expected to stay low in 2021 because of strong demand from China and a lower Indian import duty, according to officials.
Global palm oil supply is also expected to be tight this year as the La Nina weather pattern brings heavy rain.
Reporting by Mei Mei Chu and A. Ananthalakshmi; Editing by Himani Sarkar and Sherry Jacob-Phillips