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KUALA LUMPUR (Dec 3): Malaysia’s palm oil inventory is likely to have fallen 2% month-on-month (month-on-month) to 1.54 million tonnes at the end of November, the lowest level of the month since 2004, due to lower production, CGS said. -CIMB Research.
According to a survey conducted by the CGS-CIMB Futures team, it revealed that palm oil inventory is likely to have decreased 32% YoY (YoY) at the end of November, according to analysts at CGS-CIMB Research Ivy Ng Lee Fang and Nagulan Ravi in a note yesterday.
The survey showed that November crude palm oil (CPO) production likely fell 10.4% month-on-month to 1.55 million tonnes.
“Our survey revealed that Sabah farms recorded the largest drop in production, while Sarawak farms recorded the lowest. However, the smallest production compared to the last 10-year average of 1.73 million tons could be due to worker shortage problems caused by the current freeze on foreign worker permits and seasonality factors, as well as some interruptions in collection and evacuation due to heavier than usual rains caused by La Niña, ”they said. analysts.
Meanwhile, palm oil exports likely fell 17% month-on-month to 1.38 million tonnes, below the November palm oil export average of 1.49 million tonnes in the past 10 years, they noted. analysts.
“We suspect that the weaker exports could be partly due to the rebound in crude palm oil prices that has led to a rationing of consumer demand.
“Furthermore, some traders may have slowed down purchases in anticipation of possible cuts in CPO import duties by the Indian government. To recap, India reduced CPO import duties by 10% to 27.5% from of November 27, 2020, “they said.
According to analysts, the average price of crude palm oil rose 15% month-on-month and 37% year-on-year to RM 3,436 per tonne in November due to concerns about the low level of palm oil stocks in Malaysia and Indonesia, as well as due to shortage of supplies from other key competitive groceries. Oils
“We project CPO prices to trade at RM 2,800-3,400 / tonne in December in view of the projected low inventory in Malaysia, which will take time to rebuild; and higher exports from Malaysia as traders take advantage of lower import tariffs from India on CPO and Malaysia’s current zero export tax on CPO, “they said.
Analysts maintain their so-called “neutral” for the plantations sector, with Genting Plantations Bhd, Hap Seng Plantations Holdings Bhd and Ta Ann Plantations Bhd as their main options.
At the time of writing, Genting Plantations shares had fallen 11 sen or 1.1% to RM9.88, valued at RM8.87 billion. Hap Seng was down 0.55% sen or RM1.82, bringing its market cap to RM1.46 billion, while Ta Ann was up 0.32% or RM31.10 with a market value of RM1. , 37 billion.
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