KUALA LUMPUR (Aug 5): Malaysian palm oil stockpiles likely rose for the first time in five months, edging up to a three-month high, as production gains outpaced a rise in exports, a Reuters survey showed.   

Inventories in Malaysia, the world's second-largest palm oil producer, are forecast to have gained 1.8% from the previous month to 2.47 million tonnes at end-July, according to a median estimate of seven planters, traders and analysts polled by Reuters.

Stockpiles had earlier declined for four consecutive months, easing from the 3 million tonne mark at the start of the year.  

Increased inventory risks weighing on benchmark palm oil prices, which fell to a near four-year low in mid-July at RM1,916 (US$459.09) per tonne. Prices have since rebounded about 9% and were last at RM2,085.

Rising stockpiles were aided by higher output. The survey estimated production would rise 11.4% to 1.69 million tonnes, its highest level since January and the biggest monthly gain in 10 months.

"July output rose due to seasonal factors and more working days," said Ivy Ng, regional head of plantations research at CIMB Investment Bank, in a report.

The output gains were also likely aided by higher yields in Sarawak's oil palm estates, and July's rise in inventory indicated that "palm oil stocks may have bottomed in June," Ng said.

Palm oil exports were seen rising 3.8% from June to 1.44 million tonnes in July, supported by demand from key markets India, the European Union and China.

"India is restocking ahead of festivals, while the EU is buying ahead of possible import duties over palm," said Anilkumar Bagani, research head of Sunvin Group, a Mumbai-based vegetable oil broker, referring to possible duties on EU imports of Indonesian biodiesel.

"China is also buying as its oilseeds crush has slowed down due to the African swine fever, and they have to buy other vegetable oils to fulfil demand," he added.

China, the world's largest pork producer, typically imports soybeans to crush for meal, leaving soyoil as a byproduct for cooking and other food purposes, but a severe disease outbreak has curbed demand for meal.  

Official palm oil data will be published by the Malaysian Palm Oil Board ?after 0430 GMT on Aug 13.

The median results from the Reuters survey put Malaysia's consumption in July at 292,615 tonnes.

Breakdown of July estimates (in tonnes):

* Official stocks of 2,423,615 tonnes in June plus the above estimated output and imports yield a total July supply of 4,195,615 tonnes. Based on the median of exports and closing stocks estimate, Malaysia's domestic consumption in July is estimated to be 292,615 tonnes.

(US$1 = RM4.1735)