A median poll of five plantation houses showed stocks in the world's No. 2 palm oil producer jumped 13.8 percent to 1.6 million tonnes -- the highest level since April, potentially
weighing on benchmark palm oil futures
Output is expected to increase by 5.3 percent to 1.6 million tonnes according to the poll, thanks to yields improving in the second half of 2010. That compares to the start of the year when El Nino-driven drier weather prolonged yield stress for the oil palm trees that emerged from a production upswing in end-2009.
"We had enough rainfall and sunshine last month, that basically encouraged the fruiting. And the harvest (of palm fresh fruit bunches) was good prior to holiday in September," said one
poll contributor.
Harvesting on Malaysian estates picked up in August as foreign workers took leave for the Muslim fasting month of Ramadan and the Eid al-Fitr celebrations at its end. Plantation officials feared that a brewing La Nina weather condition, which often follows El Nino with heavier rains, may trigger floods and expose the palm fruits to excessive moisture.
Industry regulator Malaysian Palm Oil Board will issue August palm oil stocks, production, exports and imports data on Wednesday at 0445 GMT.
EXPORTS AT EIGHT-MONTH LOW
Malaysia's palm oil exports probably slumped 15 percent to 1.2 million tonnes -- the lowest since December -- after the world's second largest palm oil importer, China, reduced buying
on ample stocks at ports.
Traders expect exports to recover this month as top buyers India as well as China get restocked and prepare to meet demand for a string of festivals in October and November. But cargo surveyor Intetek Testing Services reported a rise of 1.1 percent in Malaysian exports between September 1 and 10, signalling that buyers are cautious over the recent price rally
in benchmark palm oil futures
The poll showed crude palm oil imports from rival Indonesia could fall 44 percent to 50,000 tonnes in August. But Oil World said in a research note that imports may hit 90,000-100,000
tonnes as planters shipped out more to avoid a rise in Indonesian export taxes due in September.
"Refiners are taking opportunities to ship everything in by August, and next month onwards the imports might be slower," said a poll contributor in Kuala Lumpur.
