Growers Expect Strong Output, Mature Trees to Boost CPO Supplies
Kuala Lumpur. Palm oil stocks in Indonesia, the world’s largest supplier, should rise 100,000 tons this month from October, boosted by strong output and more maturing oil palm trees, a top industry official said on Monday.
Stocks should hit 1.6 million tons in October and 1.7 million tons this month and could have risen higher had it not been for solid demand for crude palm oil, Derom Bangun, vice chairman of the Indonesian Palm Oil Board (DMSI) said.
The country’s rising stocks add to fears of a supply spike, with traders expecting 1.6 million to 1.65 million tons of Malaysian palm oil stocks in October that could pressure prices lower.
But Bangun said demand from India would limit the supply build-up, as well as Indonesia’s growing population that consumes 400,000 to 500,000 tons of palm oil each month.
“Export uptake for us has normalized in September from August, but we expect good demand to continue through the rest of this year. Stocks will not cross two million tons like last year,” Derom said on the sidelines of an industry conference. “And we do not have enough storage tanks to hold more palm oil, so two million will be a problem for us.”
Indonesia is the top supplier of palm oil products to India because the world’s largest edible oil importer this year buys mostly crude palm oil to supply its refiners.
Malaysia is a bigger supplier of refined products mainly to China, another top buyer, although demand has slowed a little due to high port stocks and consumer preferring rival soyoil that cooks better in colder weather.
Indonesia does not regularly publish palm oil stocks, production and export data and the benchmark palm oil prices KPOc3 on the Bursa Malaysia Derivatives Exchange follow data from Malaysia, the second largest producer .
Last week, palm oil prices weakened on talk of Malaysian stockpiles surging to 1.6 million tons.
Stocks should hit 1.6 million tons in October and 1.7 million tons this month and could have risen higher had it not been for solid demand for crude palm oil, Derom Bangun, vice chairman of the Indonesian Palm Oil Board (DMSI) said.
The country’s rising stocks add to fears of a supply spike, with traders expecting 1.6 million to 1.65 million tons of Malaysian palm oil stocks in October that could pressure prices lower.
But Bangun said demand from India would limit the supply build-up, as well as Indonesia’s growing population that consumes 400,000 to 500,000 tons of palm oil each month.
“Export uptake for us has normalized in September from August, but we expect good demand to continue through the rest of this year. Stocks will not cross two million tons like last year,” Derom said on the sidelines of an industry conference. “And we do not have enough storage tanks to hold more palm oil, so two million will be a problem for us.”
Indonesia is the top supplier of palm oil products to India because the world’s largest edible oil importer this year buys mostly crude palm oil to supply its refiners.
Malaysia is a bigger supplier of refined products mainly to China, another top buyer, although demand has slowed a little due to high port stocks and consumer preferring rival soyoil that cooks better in colder weather.
Indonesia does not regularly publish palm oil stocks, production and export data and the benchmark palm oil prices KPOc3 on the Bursa Malaysia Derivatives Exchange follow data from Malaysia, the second largest producer .
Last week, palm oil prices weakened on talk of Malaysian stockpiles surging to 1.6 million tons.