Plantation area
Maintain impartial: Malaysia’s crude palm oil (CPO) production in September rose for the third directly month, up by 1.1% month-on-month (m-o-m) to 1.84 million tonnes, because of better manufacturing in Sabah (+nine.6%) and Sarawak (+5.3%), however was partially offset by way of decrease production in Peninsular Malaysia (-four.2%). Production is set to further increase over the subsequent one to 2 months and peak from October to November, prior to the monsoon season. Overall, CPO production for the 9 months of 2019 (9M19) became up by means of nine.3% 12 months-on-yr (y-o-y) to 15.19 million tonnes, underpinned by using enhancing clean fruit bunch yields and CPO oil extraction prices all through Malaysia. We anticipate 2019 CPO manufacturing to rebound to twenty million tonnes from 19.Five million tonnes in 2018 (Oil World forecasts for Malaysia’s CPO production in 2019: 20.Five million tonnes; 2020: 20.Three million tonnes).

Palm oil exports in September weakened m-o-m, declining by using 18.Eight% to at least one.41 million tonnes. This became in large part expected because the drop in exports become partially because of the most important purchaser, India, buying much less of our palm oil products in September, following an growth in tax on delicate palm oil from Malaysia to 50% from 45%, which began in the identical month. Exports to India, China and the European Union dropped by means of forty three.6%, 25% and five.2% m-o-m respectively to 310,six hundred tonnes, 222,500 tonnes and 139,600 tonnes. For 9M19, overall exports rose by way of 15.Four% y-o-y to 14.02 million tonnes.

Malaysia’s palm oil stock in September multiplied for the first time after six consecutive months of m-o-m declines, up by way of 207,700 tonnes m-o-m (or +nine.Three%) to 2.45 million tonnes. The boom in the palm oil inventory level was anticipated because of slower call for from our pinnacle buyers in September, specifically from India. Malaysia’s palm oil stock ought to doubtlessly upward thrust within the following few months, in our view, as we input the height production duration, although it is not going to attain the record high stage of three.2 million tonnes recorded in December closing 12 months. — Affin Hwang Capital, Oct eleven