Malaysian palm oil stocks rose 13% in a month, but prices have yet to react

According to the Malaysian Palm Oil Board (MPOB), in November, crude palm oil production in Malaysia decreased by 5.3% compared to October (in October, the growth was +11%, in September -0.7%, in August +2.4%, and in July - 7.09%) to 1.94 million tonnes, and exports - by 28.1% (+18.6% in October, +7.7% in September, -0.7% in August and +3.82% in July) to 1.21 million tonnes, which led to a further increase in palm oil stocks in the country by 13% (the 9th consecutive month) to 2.835 million tonnes (in October +4.4%, in September +7.2%, in August +4.2%, in July +4% and in June +4%).

 

According to the report, January palm oil futures on the Bursa Malaysia exchange fell by only 1% to 4,061 ringgit/t or $986/t, losing 1.2% in local currency for the month, but increasing by 1.3% in dollar terms due to the strengthening of the ringgit.

 

Traders are optimistic about increasing demand in December-January, but competitive pressure from soybean and rapeseed oil is increasing, so palm oil prices may decrease significantly during December.

 

February Brent crude futures traded around $62.2/barrel during the month (-0.5% month-on-month), but the fall in Russian oil prices continues as oil inventories on tankers grow and buyers try to avoid sanctions when trading Russian oil.

 

January soybean oil futures in Chicago fell 1.2% to $1,125/tonne (-0.6% month-on-month) under pressure from lower soybean prices due to weak export demand.

 

The price of soybean oil in Brazil fell by $20-25/t to $1,110-1,115/t FOB in a week, and remains under pressure from a possible increase in exports from Argentina after the reduction in tariffs.

 

Prices for sunflower oil delivered to India increased by $5/t to $1,320-1,330/t CIF Mumbai during the week, but prices for Russian sunflower oil (delivered in December) fell by $5-10/t to $1,205-1,210/t FOB during the week.

 

Demand prices for sunflower oil in Ukraine (with delivery to ports in December) remained at $1,230/t during the week, and the number of offers from producers increased.

 

Reduced sunflower harvest forecasts in Ukraine and the Russian Federation support prices, but a significant supply of cheap palm and soybean oil is holding back further increases in sunflower oil prices.

 

Rapeseed oil prices in the EU fell by $20-25/t to $1,246/t FOB Netherlands during the week amid a sharp increase in the global rapeseed harvest forecast .