Malaysia end-March palm oil stocks seen dipping as virus curbs disrupt output

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KUALA LUMPUR (April 3): Malaysia's palm oil inventories for March likely slipped below February's end-stocks to 1.65 million tonnes, as better than expected exports offset a small rise in output likely disrupted by the coronavirus pandemic, a Reuters survey showed.

March stockpiles likely fell 1.9% from the previous month, its lowest since June 2017, according to the median estimate of nine planters, traders and analysts polled by Reuters. 

Production may see a 2% month-on-month increase to 1.31 million tonnes, its second month of recovery, after plummeting in January.

A disruption to palm operations and a temporary shutdown of some plantations in the world's no.2 producer as part of month-long movement restrictions against the new coronavirus, impacted productivity, said Ivy Ng, regional head of plantations research at CIMB Investment Bank.

March exports likely rose 6% from February to 1.15 million tonnes, but are expected to fall this month. 

"Overseas demand rose at the back of strong oleo-chemical shipments to the European Union and on recovery in buying from China, after nearly three months in lockdown," said Sathia Varqa owner and co-founder of Singapore-based Palm Oil Analytics.

Some buying ahead of the Islamic holy month of Ramadan before countries around the world, including top buyer India, enforced lockdowns against the coronavirus also boosted exports.

Official palm oil data will be published by the Malaysian Palm Oil Board on March 10. 
The median results from the Reuters' survey put Malaysia's consumption in February at 258,313 tonnes.     
(US$1 = 4.3520 ringgit)