KUALA LUMPUR, Dec 5 (Reuters) -
Malaysian palm oil stocks likely hit another record high in November as exports
failed to keep pace with output, a Reuters survey of five plantation firms
showed on Wednesday, potentially weighing on prices.
Inventory in the world's No.2 palm
oil producer may have grown 2.8 percent to 2.58 million tonnes from a previous
record of 2.51 million tonnes seen in October as output stayed high despite a
slight weakening in yields, according to the poll.
Malaysia's palm oil output in
November may have dropped 5 percent to 1.84 million tonnes from a month ago as
heavy rains disrupted some harvesting and yields tapered off after months of
strong growth.
But that was still enough to offset
exports at 1.70 million tonnes, down 3.3 percent from a month ago as there was
a lack of vessels to transport the tropical oil to big consumers in India,
China and Europe.
Imports of crude palm oil from top
producer Indonesia likely surged more than two fold to 50,000 tonnes in
November, from 19,102 tonnes the month before, as Malaysian refiners took
advantage of lower Indonesian prices to stock up.
FACTORS TO WATCH:
In December, Malaysian palm oil
firms holding tax free export quota for the crude grade will be rushing to push
out shipments before the allocations expire in end-December.
That means Malaysian stocks are
unlikely to hit 3 million tonnes by end-2012 as forecast by industry analyst
Dorab Mistry.
It also means there could be a stock
drawdown in December, the first monthly drop since June this year, giving much
needed support to palm oil futures that are set
to post their weakest yearly performance since the financial crisis in 2008.
The benchmark February contract on the Bursa
Malaysia Derivatives Exchange has shed about 27 percent so far this year, while
in 2008 it dropped 44 percent.
Malaysia this month is also set to
announce its crude palm oil export tax for January 2013, expected to be lower
than the current 23 percent duty. Lower export taxes for the grade are likely
to boost shipments, further eating into stocks.
Another factor to watch would be
Chinese buying.
Buyers from China, the world's
second largest importer of palm oil, are likely to snap up refined palm oil
cargoes before stricter quality measures set by Beijing take effect on Jan. 1.
Malaysian output is expected to
decline further as seasonally heavy rains towards the end of the year disrupt
harvesting and trigger floods that complicate logistics.