January 4, 2019 / 7:58 AM / 6 months ago

PREVIEW-Malaysia Dec palm stocks expected at 19-yr high of 3.1 mln T

    * Dec stocks to rise 4.3 pct from Nov to 3.14 mln T -survey
    * Output to fall to 1.78 mln T, down 3.6 pct -survey
    * Exports estimated up 4.7 pct at 1.44 mln T -survey
    * Malaysian Palm Oil Board data due Jan. 10

    By Emily Chow
    KUALA LUMPUR, Jan 4 (Reuters) - Malaysia's palm oil stocks
are expected to have hit a 19-year high for end-December,
surpassing the 3 million-tonne mark as production levels exceed
exports, according to a Reuters survey. 
    Stockpiles are expected up 4.3 percent from the previous
month to 3.14 million tonnes, based on the median estimate of
seven planters, traders and analysts. 
    This would mark a seventh straight month of increase and
Malaysia's highest stockpile levels since January 2000,
according to Refinitiv Eikon data. MYPOMS-TPO 
    Inventory gains could weigh on benchmark palm oil prices
, which have recovered from three-year lows touched in
November below 2,000 ringgit a tonne. 
    Palm edged up 0.1 percent on Friday at 2,152 ringgit
($519.93) a tonne. 
    "We think the market will still be carrying high stocks all
the way until end-March," said a Singapore-based trader. 
    "If we can't draw down stocks by end-March, after going
through the low production cycle, it would be extremely
difficult to draw stocks thereafter as production recovers," he
said, adding that he has observed a pickup in exports to key
markets China and India. 
    The survey showed Malaysia's December exports are expected
to have risen 4.7 percent from the previous month to 1.44
million tonnes, which would be the first gain after two months
of decline. MYPOME-PO 
    Demand for palm oil, the world's most commonly used edible
oil, could further rise in the coming months following India's
move to cut palm oil import taxes. 
    India, the world's largest importer of edible oils, earlier
this week said it would lower the duty on crude palm oil imports
to 40 percent from 44 percent, while a tax on refined oils was
cut to 50 percent from 54 percent. 
    Additionally, Malaysian shipments of refined palm oil will
be taxed at the lower rate of 45 percent, compared with the
earlier 54 percent. 
    The poll showed as well that December production is likely
to have declined 3.6 percent to 1.78 million tonnes, which would
be its second straight month to fall. MYPOMP-CPOTT 
    Palm oil production usually tapers off at year-end before
seasonally rising towards the end of the first quarter. 
    Official palm oil data will be published by the Malaysian
Palm Oil Board ‪after 0430 GMT on Jan. 10. 
    The median results from the Reuters survey put Malaysia's
consumption in December at 279,252 tonnes. 
    Breakdown of December estimates (in tonnes): 
                         Range              Median
 Production      1,720,000 - 2,000,000     1,779,000
 Exports         1,356,559 - 1,500,000     1,440,000
 Imports            50,000 - 110,000        70,000
 Closing Stocks  3,067,128 - 3,309,842     3,136,736
* Official stocks of 3,006,988 tonnes in November plus the above
estimated output and imports give a total December supply of
4,855,988 tonnes. Based on the median of exports and closing
stocks estimate, Malaysia's domestic consumption in December is
estimated to be 279,252 tonnes. 
    ($1 = 4.1390 ringgit)

 (Reporting by Emily Chow; Editing by Tom Hogue)
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