InfoSAWIT, KUALA LUMPUR – Crude palm oil (CPO) stock in Malaysia by the late of June 2022 hit the highest level in the past seven months because Indonesia accelerates CPO exports.

The stock of second biggest CPO producer in the world escalated up to 8,76% from the previous month to be 1,66 million tons – the highest since November 2021, as Malaysian Palm Oil Board (MPOB) noted. CPO production increased 5,76% from May to be 1,55 million tons and the numbers were the highest ones in the past seven months.

The less increasing production as it was hoped happened for the continuous supply issues in most of palm oil plantations in Malaysia, and also the lack of workers, as a trader in Kuala Lumpur told, as quoted from Reuters.

The exports in the country decreased 13,26% to be 1,19 million tons after Indonesia cancelled the temporary export ban in May 2022 but published series of regulations to accelerate the exports.

The government of Indonesia planned to escalate biodiesel mixture to diesel up to 35% or known as B35 which was reaching only 30%. The plan would be effective on 20 July 2022. The other issue is the consideration to cut off export tax which triggered and reduce the numbers of stock.

Chief of Plantation Researcher at CGS-CIMB Research, Ivy Ng said, B35 would help to increase CPO use, reduce stock and escalate the price sentiment in Indonesia, as she said in the latest report.

But B35 policy would take time to reduce the stock effectively because the additional absorption of CPO could be only reaching 134.000 ton per month. (T2)