SINGAPORE, Sept 5 (Reuters) - Malaysia's August palm oil stocks likely climbed to their highest in nine months as still-high production offset a strong rise in exports, a Reuters survey showed on Wednesday.
Stocks in the world's second largest palm oil producer most probably climbed 4.5 percent to 2.09 million tonnes, the highest since November and crossing the two-million-tonne mark for the first time since February, the survey of six planters showed.
The rise was capped by strong exports, which jumped almost 12 percent from a month ago to 1.45 million tonnes, thanks to higher shipments of crude products and a demand recovery from major food buyers China and India.
Higher crude palm oil exports were in part due to the extra 2 million tonnes of tax-free quota issued late July, a move to cut stocks that had been building up as buyers snap up cheaper Indonesian cargoes of refined palm. (Full Story)
Palm oil output probably fell 3 percent to 1.64 million tonnes from a year-high of 1.69 million tonnes in July as harvesting slowed in August owing to a slew of public holidays.
However, production levels remained higher than demand, especially as average output for the first half of the year stood at just 1.3 million tonnes.
Imports of crude palm oil from top producer Indonesia were expected to reach 74,591 tonnes in August, respondents said.
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Weather concerns are in focus as the brewing El Nino bringing drier weather to Southeast Asia, leading to the development of male flowers at the expense of oil-yielding female ones that crimps production and could support prices.
Benchmark Malaysian palm oil futures FCPOc3 fell 4 percent so far this year, although the drought in the soy-exporting U.S. Midwest and weaker production in South America could crimp global edible oil supply and lift prices.
Palm oil may have to meet more Asian demand owing to a slew of major public holidays coming up in China and India in October and November. The tropical oil currently trades at a discount at more than $250 per tonne to soyoil.
Yet there could be further build-up in Malaysian palm oil stocks, with Indonesia capturing more market shares after it cut its September export tax rate for crude and refined grades that improve margins.
