Malaysia's palm oil inventory increased sequentially in April!

After five consecutive months of decline, Malaysian palm oil reserves unexpectedly rose in April, 1.9% month-on-month to 1.74 million tons.

According to data released by the Malaysian Palm Oil Authority (MPOB) today, the country's palm oil inventory in April was 1.74 million tons, exceeding the forecast value of the survey conducted by Bloomberg last week.

Earlier, according to a Bloomberg survey, the market expected palm oil inventories to fall to 1.63 million tons in April, hitting the lowest level in the past year.

The reason palm oil inventories were higher than expected was that production in the same month exceeded expectations and exports fell.

Domestic palm oil production in April rose 7.9% monthly to 1.5 million tons, higher than market expectations of 1.45 million tons; while palm oil exports fell 7% month-on-month to 1.23 million tons, and the market forecast was 1.21 million tons.

Anil Guma, head of research at Sunvin Group in Mumbai, India, told Bloomberg that the latest data is slightly unfavorable. Both inventory and production are rising, but the market has already reacted to this.

“The price of palm oil has declined recently.”

Anil Guma also pointed out that if the price of palm oil falls below the level of RM3,690 per ton, it may attract some buyers to take advantage of the low absorption. In particular, stocks in major producers such as Indonesia, Malaysia, and Thailand are all relatively low, and China may replenish their inventories.

Prior to the release of data this afternoon, the Malaysian Exchange's benchmark crude palm oil futures (FCPO) fell for 3 consecutive days to RM3,790 per tonne, approaching the lowest level since the beginning of February.