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CPO Stock in Malaysia Could be Increasing in June

Doc. InfoSAWIT
CPO Stock in Malaysia Could be Increasing in June

InfoSAWIT, KUALA LUMPUR – Crude palm oil (CPO) stocks in Malaysia by the late of June 2022 could be in the highest level in the past seven months because of the decreasing CPO and its derivative exports from Indonesia, as Reuters surveyed, on last Tuesday.

CPO stock in Malaysia could be increasing 12,3% from the previous month to be 1,7   million tons, as eight traders analyzed. The production would also be increasing 8,3% to be 1,58 million tons, the highest numbers since December 2021.

As quoted from The Star, the stocks would be increasing but the production could be decreasing in Semenanjung Malaysia. It might happen because the mills reduced FFB purchase, as Sathia Varqa, on founder of Palm Oil Analytics in Singapore, said.

Some mills temporarily stopped the production for the past weeks in June because CPO was not expensive and did not deliver profits after it dramatically decreased 22% in CPO reference contract.

Prior CPO exports escalated but in May after Indonesia banned the exports and revoked, CPO exports decreased 9,9% to be 1,22 million tons and started implementing policies to escalate the exports again.

Since CPO export revocation, CPO gets cheaper significantly but the exports from Indonesia did not aggressively increased as it was hoped, Ronny Lau, a trader from commodity company in Singapore - Four Bung, said.

Indonesia escalated the numbers of CPO export quota and is considering to escalate the numbers of palm oil biodiesel mixture to help the smallholders when the stocks are still in big numbers. (T2)