March 5, 2018 / 4:29 AM / 18 days ago

PREVIEW-Malaysia Feb palm oil stockpiles forecast to fall to four-month low

    * Feb end-stocks forecast down 6.9 pct at 2.37 mln T -survey
    * Output in Feb likely fell 12 pct to 1.4 mln T -survey
    * Exports forecast to fall 11.9 pct to 1.33 mln T in Feb
    * Malaysian Palm Oil Board data due March 12

    By Emily Chow
    KUALA LUMPUR, March 5 (Reuters) - Malaysian palm oil stocks
are expected to fall to a four-month low at the end of February
as production declines outweighed a drop in exports, according
to a Reuters poll.
    Palm stockpiles in Malaysia, the world's second-largest
producer after Indonesia, are expected to have fallen 6.9
percent to 2.37 million tonnes, its lowest since October 2017,
according to the median of eight estimates from planters,
traders and analysts polled by Reuters. MYPOMS-TPO
    Declining stockpiles could boost benchmark palm oil prices
, which have fallen their lowest since Feb. 5 after
major edible oils importer India raised its palm oil import tax
to the highest in over a decade. 
    Palm prices were down 0.9 percent on Monday morning at 2,453
ringgit ($629.46) a tonne. 
    Poll respondents said stocks likely fell on declining
production, which for February was pegged at 1.4 million tonnes.
The forecast output is down 12 percent from the previous month
and would be at its lowest in a year. MYPOMP-CPOTT
    "We think production should bottom in February... on fewer
working days," said Voon Yee Ping, a plantations analyst at
Kenanga Research. 
    "Looking ahead, we believe production is likely to continue
seeing good year-on-year growth for the rest of first half 2018,
particularly in Sabah," said Voon, referring to the state in
East Malaysia.
    Production of palm oil, commonly used to make various
products from cooking oil to cosmetics, is expected to
seasonally decline in the first quarter of the year before
rising again towards peak production in the third quarter. 
    Annual output in Indonesia and Malaysia, the world's top two
producers, may rise to record levels in 2018 as palm trees fully
recover from a crop damaging El Nino weather pattern.

    The poll also forecast for exports to fall 11.9 percent to
1.33 million tonnes in February, its lowest since April, due to
slower demand from China. MYPOME-PO
    "China imported less palm oil due partly to the high
stockpile of edible oils in the country and rising soybean oil
supplies due to higher domestic crushing activities," said Ivy
Ng, regional head of plantations research at CIMB Investment
    Chinese palm oil imports could fall this year as it boosts
soybeans purchases instead, giving it ample supplies of
domestically produced soyoil.
    Palm's demand moving forward could be further impacted by
India's move to raise its import taxes. 
    "It will make palm oil costlier in India by around 15
percent. This could lead to weaker demand for palm oil from
India, resulting in softer CPO prices," said Ng.
    Official data will be released by the Malaysian Palm Oil
Board after 0430 GMT on March 12. 
    The median figures from the Reuters survey imply Malaysian
consumption of 266,547 tonnes in February. 
    Breakdown of February estimates (in tonnes):
                         Range              Median
 Production      1,320,000 - 1,409,000     1,395,600
 Exports         1,230,000 - 1,377,047     1,333,392
 Imports            10,000 - 35,000         28,350
 Closing Stocks  2,300,000 - 2,457,000     2,371,691
* Official stocks of 2,547,680 tonnes in January plus the above
estimated output and imports give a total February supply of
3,971,630 tonnes. Based on the median of the exports and closing
stocks estimates, Malaysia's domestic consumption in February
would be 266,547 tonnes.

($1 = 3.8970 ringgit)

 (Reporting by Emily Chow; Editing by Christian Schmollinger)
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