The projected decline in palm oil reserves returned prices in Malaysia to a level above 5 thousand ringgit / ton
Since the beginning of the New Year, palm oil prices on the Malaysian stock exchange have jumped 7% on the back of data on reduced production and reduced stocks due to severe floods in December.
Quotes rose by 4.6% amid heavy precipitation, which led to floods and a stop in Palm harvesting, which will cause a reduction in production. In winter, production on plantations is traditionally low seasonally, so an additional drop in volumes due to rain has already led to a jump in prices. However, their further growth will be limited by the low export rates that analysts expect due to high prices.
According to an average estimate of ten planters, traders and analysts surveyed by Reuters, in December, production in Malaysia, the world's second – largest producer of palm oil, will decrease by 8.6% compared to November to the lowest level since March of 1.49 million tons, exports – by 4.9% to 1.4 million tons, and stocks-by 4.9% to a 5-month low of 1.73 million tons.
Traders ' expectations were confirmed by official data. On January 10, The Malaysian palm oil Council (MPOB) published data that in December, palm oil production decreased by 11.26% compared to November to the lowest level in 9 months - 1.45 million tons, palm oil exports from Malaysia decreased by 3.38% to 1.41 million tons, while its domestic consumption increased by 31% to 373.1 thousand tons. 1.58 million tons, which is the lowest figure for the last 6 months.
FAS USDA revised down the forecast for crude palm oil production in Malaysia in my 2021/22 from 18.2 million tons to 18.0 million tons, taking into account the impact of abnormal weather caused by Super Typhoon Paradise (monthly precipitation rate fell in one day on December 18).
March palm oil futures on the Malaysian stock exchange rose 7% to 5,029 ringgit/ton, or 1 1,198/ton, since the beginning of the year, and returned to levels close to the record levels of late November. Support for the growth of palm oil prices is also provided by the growth of oil prices, Brent futures since the beginning of the year also rose by 3.8% to 8 81 per barrel.
Soybean oil prices on the Chicago Stock Exchange also started the year with strong growth and added 5.3% by January 5, but yesterday they slightly decreased by 1.6% to.1,278/ton, in general, they rose by 8.8% over the month amid a lack of precipitation in South America and reduced forecasts for soybean production.
Prices of black sea sunflower oil offers also continue to grow against the background of the growth of neighboring vegetable oil markets and are offered at the level of F 1360-1400/ton FOB, although traders in Russia and Ukraine are just getting active this week. Tomorrow, the USDA will update the global balance sheets of oilseeds and vegetable oils - this, in turn, is likely to reduce the supply of soybean oil, which will support the markets.
