April 5, 2018 / 4:16 AM / 4 months ago

PREVIEW-Malaysia March palm oil stockpiles seen dipping on export surge - survey

    * March end-stocks forecast to hit 5-month low -survey
    * Rise in exports cutting inventories -survey
    * Exports forecast to reach more than 18-month high -survey
    * Malaysian Palm Oil Board data due April 10

    By Emily Chow
    KUALA LUMPUR, April 5 (Reuters) - Malaysia's palm oil
inventories for the end of March are expected to have slipped to
their lowest in five months, a Reuters poll showed, as a surge
in exports outpaced production growth.
    Stockpiles in the world's second-largest producer of palm
oil are forecast to have fallen for a third month to 2.27
million tonnes, down 8.6 percent from February, according to the
median of eight estimates from planters, traders and analysts
surveyed by Reuters. MYPOMS-TPO
    The decline in stock levels to their lowest since October
may lend further support to benchmark prices, which
rose to a one-month high on Thursday morning. 
    Palm oil was recently up 0.7 percent at 2,472 ringgit
($639.26) a tonne.
    A jump in exports is helping stock levels decline, according
to the poll's respondents. Exports were forecast to have risen
to the highest levels in over a year and a half, at 1.57 million
tonnes, up 19.3 percent from February. MYPOME-PO 
    The expected surge in shipments, also forecast to be the
highest monthly rise in over a year and a half, is attributed to
buyers stocking up on supplies before Malaysia reinstates export
taxes on the commodity.
    Malaysia had earlier set its April crude palm oil export tax
at 5 percent following a three-month suspension to boost demand
and reduce stockpiles. 
    "The month-on-month rise in exports in March was due mainly
to stronger demand from China, India and Pakistan as traders
rushed to export crude palm oil from Malaysia ahead of the
reinstatement," said Ivy Ng, regional head of plantations
research at CIMB Investment Bank.
    Still, April exports could be strong due to Ramadan, which
begins in mid-May this year. The Muslim holy month usually leads
to higher palm oil demand for cooking in Muslim populated
regions, as devotees break day-long fasts with communal feasts. 
    Poll respondents also forecast production to have risen 11.3
percent to 1.49 million tonnes in March, the first monthly gain
    The gains are likely to have been in line with seasonal
trends and also because of a higher number of working days, poll
respondents said.
    "We saw the strongest growth in Peninsular Malaysia, as many
estates in East Malaysia were affected by wet weather in March,"
said a Malaysian-based trader.
    "However if March production hits 1.5 million tonnes, it
will be a record high for the month and April production is
unlikely to grow much higher," the trader said.
    Official data will be released by the Malaysian Palm Oil
Board after 0430 GMT on April 10. 
    The median figures from the Reuters survey imply Malaysian
consumption of 192,353 tonnes in March. 
    Breakdown of March estimates (in tonnes):
                         Range              Median
 Production      1,424,000 - 1,571,100     1,494,500
 Exports         1,351,700 - 1,581,000     1,565,000
 Imports            30,000 - 67,165         50,000
 Closing Stocks  2,177,000 - 2,502,100     2,265,000
* Official stocks of 2,477,853 tonnes in February plus the above
estimated output and imports give a total March supply of
4,022,353 tonnes. Based on the median of the exports and closing
stocks estimates, Malaysia's domestic consumption in March would
be 192,353 tonnes.

($1 = 3.8670 ringgit)

 (Reporting by Emily Chow; Editing by Aaron Sheldrick)
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