Malaysia’s July 2019 inventory reduced slightly by 0.79% mom to 2.392m tonnes as exports increased 7% mom to 1.49m tonnes. The inventory number however, is still higher than July18’s level of 2.23m tonnes. The decline in inventory also reflects the 63.8% drop in PO import of 36.6k tonnes (June18: 101.3k tonnes). Notably, stocks of CPO and PPO (processed PO) decreased slightly by 0.7% and 0.9% mom to 1.34m tonnes and 1.06m tonnes respectively during the period – with all states recorded lower CPO stocks except for Peninsular and Sarawak. We project stock level may start to build up again in the coming months given seasonal increase in production. We predict ending stocks to close at 2.42m tonnes at the end of 2019.
Palm oil export volume increased 7.37% mom to 1.485m tonnes in July 2019 as major importing countries like India and Pakistan increased their intake in preparation for festivities (Table 3: mom and yoy change). Although we predict that demand might be muted due to increase in uncertainty in the global economy, we anticipate that demand from China, India and EU would continue to be healthy.
Source: BIMB Securities Research - 13 Aug 2019
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