Malaysia palm oil future prices increased more than 1%, on weak fundamentals projections slo
wing output in Malaysia and easing stock levels in Indonesia supported the prices.
This month MPOB data, Malaysian palm oil production has declined at 1.85 million tons in th
e month of November, which is considerably lower than market expectations. However, 12% fall in exports has pushed inventories to nearly two decades high at 3.01 million tons.
SPPOMA production for first 15 days – FFB production is down by 3.37%, oil ratio increased by 0.46% and total production for Dec’s first 15 days is down by 1.15%. also, due to heavy rains in the both regions can hamper FFB harvest and production may slow down even, ﬂood conditions at Sumatra, Kalimantan province of Indonesia and Sarwak & P. Malaysia regions of Malaysia noticed.
Malaysia palm oil export for Dec’18 would remain ﬂat to 1.37-1.38 MMT compared to previous month. On other hand, Indonesia exporters are expected to lift the beneﬁt of zero export leavy and thus, Indonesia export may outgrowth by 4-5%.
Amsepcts pegged export for 15 days of Dec is 524,083 MT compared to 549,488 MT down by 25,405 MT or 4.62% from the previous moth while ITS pegged 525,939 MT down by 4.70%
Overall market view is slightly supportive as inventory level in Indonesia is expected to down and Malaysian government plans to aggressively push B-10 programme by December may also support CPO prices. And further increasing spread between soy oil and CPO prices may support palm oil prices.