Malaysian Palm Oil Exports Slump to Lowest Since 2007
Malaysian palm oil exports experienced a bigger than expected decline, to the lowest level in eight years causing a drop in crude palm oil prices.
Crude palm oil prices fell for five consecutive days after data released by the Malaysian Palm Oil Board showed the country’s inventories higher than expected, falling only 1.5% to 1.74 million tons in February, when investors were expecting a decline of 6% to 1.67 million tons.
Malaysia’s crude palm oil production was down 3.4% month on month in February as output was pressured by flooding. However, exports fell more than was forecasted, falling 18% in February month on month to 971,640 tons – the lowest since July 2007, on weaker demand from China, Pakistan, the EU, and the U.S., as palm oil fuel is not suitable for cold weather use.
Malaysian exports continued to be weak advancing into March as well, as reports from cargo surveyor, Intertek Testing Services showed shipments falling 12.3% in the first ten days of the month compared to the same period of time in the previous month.
Experts are not expecting a boost to palm oil pricing in the near future, seeing neither a significant decline in production, nor a significant increase in exports, and are retaining a neutral outlook on palm oil pricing.