• Malaysian Palm Oil Board (MPOB) has released the country’s palm oil statistics for April 2015. Palm oil inventory rose for the second month in a row after climbing by 7.0% in March. Palm oil inventory increased by 17.6% from 1.87mil tonnes in March to 2.19mil tonnes in April. This was above consensus estimates of an inventory level of 2.09mil tonnes for the month of April.
• The rise in palm oil inventory in April was due to a 13.3% MoM expansion in palm oil production and and stagnant exports.
• Domestic disappearance inched down from 190,370 tonnes in March to 189,940 tonnes in April. In the first four months of the year, domestic disappearance of palm oil amounted to 771,190 tonnes, which was 14% of the country’s palm oil production. Domestic disappearance amounted to 825,960 tonnes in the same period last year.
• Average CPO price slid marginally from RM2,240/tonne in March to RM2,214/tonne in April. Average CPO price was RM2,253/tonne in the first four months of the year, 15.8% lower than the average price of RM2,676/tonne recorded in the same period last year. Average monthly price discount between soybean oil and CPO was 11.8% from January to April 2015 compared with 9.9% in 2014.
• CPO output in Malaysia continued to improve in April even after the strong 33.3% MoM surge in March. We reckon that the country’s CPO output would be robust until the peak season in late-3Q2015 or early-4Q2015. Malaysia’s CPO production shrank by 6.3% from 5.84mil tonnes in 4M2014 to 5.47mil tonnes in 4M2015. Industry experts are forecasting Malaysia’s CPO production to improve by 0% to 2% in 2015F.
• CPO production in Peninsular Malaysia grew by 10.7% MoM to 933,085 tonnes in April while Sabah recorded palm oil production of 475,838 tonnes in April compared with 405,830 tonnes in March. Sarawak’s CPO production expanded by 15.4% MoM to 284,516 tonnes in April.
• Inventory of palm oil in processed form declined by 3.6% MoM to 923,751 tonnes in April while inventory of crude palm oil surged by 40.0%. Peninsular Malaysia recorded 635,970 tonnes of inventory of crude palm oil in April versus 442,983 tonnes in March while Sabah’s inventory of crude palm oil rose by 42.9% MoM to 478,540 tonnes in April. Sarawak’s inventory of crude palm oil expanded by 20.1% from 129,883 tonnes in March to 155,937 tonnes in April.
• Palm oil exports stagnated MoM in April as higher exports to China were offset by lower demand from India. Palm oil exports to China surged by 97.9% MoM to 262,713 tonnes in April while India’s palm oil imports fell by 70.6%. In the first four months of the year, China’s imports of Malaysian palm oil contracted by 32.4% YoY to 676,458 tonnes.
• Biodiesel exports plunged from 824 tonnes in March to 186 tonnes in April. Malaysia’s biodiesel exports improved from 22,285 tonnes in 4M2014 to 39,293 tonnes in 4M2015.

Source: AmeSecurities Research - 12 May 2015