Indonesia’s palm oil reserves poised to drop
Palm oil inventories in Indonesia, the world’s largest supplier, probably declined in October to the lowest level in 16 months as rain disrupted production and exports gained, boosting the outlook for prices, Bloomberg reported.
Reserves shrank 8.5 per cent to 2.04 million metric tonnes from 2.23 million tonnes in September, and compared with 2.6 million tonnes a year earlier, according to the median of estimates from five plantation executives, traders and refiners. That is the lowest since 1.85 million tonnes in June 2012. Exports rose 3.7 per cent to 1.7 million tonnes, and output was unchanged at 2.4 million tonnes.
Futures in Kuala Lumpur entered a bull market this month and are heading for their first annual gain in three years on speculation that production in top producers Indonesia and Malaysia is trailing analysts’ estimates. Output of the oil, used in everything from candy to cosmetics, is typically highest from July to October. Stockpiles in Indonesia may drop through the fourth quarter on lower-than-expected production, according to Wilmar International Ltd., the world’s top palm oil trader.
“Refineries are scrambling for palm oil,” said Sahat Sinaga, executive director at the Indonesian Vegetable Oil Industry Association. “Inventories may drop further in November to about 1.8 million tons and that may boost prices.”
Several major plantations in Indonesia said that output unexpectedly fell 7 per cent to 10 per cent in the first 10 months because of excessive rain and the growing cycle. The board may cut its production estimate when it gets November data, he said. The group lowered its forecast to 26.7 million tonnes to 27 million tonnes on September 30 from 28 million tonnes. Output was 25.7 million tons in 2012.
A decline in production would contrast with the US Department of Agriculture’s prediction for a record 31 million tonnes in 2013-2014. Output may exceed 25 million tonnes this year, Indonesia’s Agriculture Minister Suswono said on November 8.
Palm oil inventories in Indonesia, the world’s largest supplier, probably declined in October to the lowest level in 16 months as rain disrupted production and exports gained, boosting the outlook for prices, Bloomberg reported. Reserves shrank 8.5 per cent to 2.04 million metric tonnes from 2.23 million tonnes in September, and compared with 2.6 million tonnes a year earlier, according to the median of estimates from five plantation executives, traders and refiners. That is the lowest since 1.85 million tonnes in June 2012. Exports rose 3.7 per cent to 1.7 million tonnes, and output was unchanged at 2.4 million tonnes....
Palm oil inventories in Indonesia, the world’s largest supplier, probably declined in October to the lowest level in 16 months as rain disrupted production and exports gained, boosting the outlook for prices, Bloomberg reported.
Reserves shrank 8.5 per cent to 2.04 million metric tonnes from 2.23 million tonnes in September, and compared with 2.6 million tonnes a year earlier, according to the median of estimates from five plantation executives, traders and refiners. That is the lowest since 1.85 million tonnes in June 2012. Exports rose 3.7 per cent to 1.7 million tonnes, and output was unchanged at 2.4 million tonnes.
Futures in Kuala Lumpur entered a bull market this month and are heading for their first annual gain in three years on speculation that production in top producers Indonesia and Malaysia is trailing analysts’ estimates. Output of the oil, used in everything from candy to cosmetics, is typically highest from July to October. Stockpiles in Indonesia may drop through the fourth quarter on lower-than-expected production, according to Wilmar International Ltd., the world’s top palm oil trader.
“Refineries are scrambling for palm oil,” said Sahat Sinaga, executive director at the Indonesian Vegetable Oil Industry Association. “Inventories may drop further in November to about 1.8 million tons and that may boost prices.”
Several major plantations in Indonesia said that output unexpectedly fell 7 per cent to 10 per cent in the first 10 months because of excessive rain and the growing cycle. The board may cut its production estimate when it gets November data, he said. The group lowered its forecast to 26.7 million tonnes to 27 million tonnes on September 30 from 28 million tonnes. Output was 25.7 million tons in 2012.
A decline in production would contrast with the US Department of Agriculture’s prediction for a record 31 million tonnes in 2013-2014. Output may exceed 25 million tonnes this year, Indonesia’s Agriculture Minister Suswono said on November 8.
