Singapore — Malaysia's palm oil exports climbed up 21.19% month on month at 1.676 million mt, amid a jump in volumes to China, India and EU countries, according to data released Monday by the Malaysian Palm Oil Board.
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Exports to China climbed 17.93% month on month to 317,212 mt in January, while cargoes to EU countries spiked 157.47% at 253,773 mt. Indian imports of Malaysian palm oil also climbed 12.02% month on month to 318,342 mt.
Meanwhile, palm oil production in Malaysia fell 3.9% month on month in January to 1.737 million mt, MPOB data showed.
"There is a noticeable rise in domestic consumption due to [a rise in demand ahead of] the [Lunar New Year] festival, when large meals are prepared using the edible oil," Sathia Varqa, owner and co-founder of Singapore-based Palm Oil Analytics, said. "Domestic consumption may see a further rise in February, as the country ramps up biodiesel production [for March requirements] to meet B10 demand. Malaysian B10 demand in February is, however, expected to be subdued due to a slowdown in trade during the [Lunar New Year] festival," he added.
Exports to India rose 12.02% month on month in response to a reduction in Indian tariffs on crude palm oil and its refined version in January. The duty on crude palm oil was reduced to 40% from 44%, while for refined palm oil it was revised to 50% from 54%. In addition, the duty on RBD palm olein from Malaysia was lowered from 54% to 45%.
Palm-based PME biodiesel exports from Malaysia were down 41.24% month on month in January, the data showed, at 44,287 mt. "This was due to an end to discretionary blending coupled with the cold winter months, which exclude the usage of palm oil for biodiesel," another Singapore-based analyst said.
CPO inventories in Malaysia were down 6.69% month on month in January at 3.0 million mt, according to the same data.
"Production and stocks seem to be higher than expected, but end-stocks were within range," the Singapore-based analyst said.
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Elsewhere, data for February 1-10 compared with January 1-10 from the Southern Peninsular Palm Oil Millers Association showed that palm oil production in Malaysia was down 47.41%.
"This is probably due to fewer working days [in February]," the analyst explained.
Separately, Dorab E Mistry, director at London-based Godrej International, in his presentation at the Globoil India conference last Wednesday, forecast almost the same level of palm production for Malaysia in 2019 versus 2018, and raised his production forecast for Indonesia by 2 million mt for the current year from 2018.
"For 2019, my forecast for Malaysian production is at 19 million-19.5 million mt and Indonesian production at 44 million mt," Mistry said.
In 2018, Malaysia's palm production stood at 19.50 million mt, while Indonesia produced 42 million mt. "World palm production will only rise 2 million-2.5 million mt, against a 5 million mt rise last year," he added.
Mistry said the high cycle for palm production witnessed during 2018 would come to an end around February-March 2019 as the palm trees would need a period of rest.
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