Sept. 10 (Bloomberg) -- Palm oil production in Malaysia gained for a sixth month in August, while stockpiles in the world’s second-largest producer missed analysts’ expectations, staying near a two-year low, official data showed.
Output gained 3.6 percent to 1.74 million metric tons from July, the highest since December, according to data from the Malaysian Palm Oil Board. Inventories were 1.67 million tons, little changed from July, and 1.2 percent higher than June which was the lowest level since March 2011. That compares with the median estimate of 1.71 million tons for reserves in a Bloomberg survey published last week. Shipments gained 7.4 percent to 1.52 million tons, while imports tumbled 85 percent to 7,533 tons.
Prices of the most-consumed cooking oil have dropped 20 percent in the past year as supplies beat demand. While palm is produced year-round, output typically accelerates in this half because of growing cycles. Production this month will be “much higher” than August, when growth slowed because of the Eid festival holidays, according to Ben Santoso, an analyst at DBS Vickers Securities Pte. in Singapore. Eid marks the end of the Muslim fasting month of Ramadan.
“Going into September to October, production may spike in a stronger fashion,” Arhnue Tan, an analyst at Alliance Investment Bank Bhd., said by phone from Kuala Lumpur. “There is a chance for inventories to rise in coming months, however, it won’t be a very significant increase.”
Palm oil for November delivery dropped 2.1 percent to 2,348 ringgit ($718) a ton on the Bursa Malaysia Derivatives, the steepest drop at close for the most-active contract since July 25. Futures jumped 7.5 percent in August, the biggest monthly gain since December 2010 as a weaker ringgit against the dollar boosted export prospects.
Shipments from Malaysia advanced 11 percent to 462,671 tons in the first 10 days of September from the same period last month, Intertek said today.
World stockpiles of the oil that’s used in everything from candy to biofuel will surge 21 percent to a record 9.7 million tons by the end of 2013-2014, while demand expands 4.6 percent, the least in 12 years, the U.S. Department of Agriculture says.
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