SINGAPORE, April 5 (Reuters) - Malaysia's palm oil stocks
likely edged lower in March as production eased for the sixth straight month, a
Reuters survey of five plantation companies showed on Friday.
Inventory levels may have dropped 3.8 percent in March to
2.35 million tonnes, marking the third monthly decline, to the lowest level
seen since last September. Stocks hit a record 2.63 million tonnes in December.
Production most likely fell 1.2 percent from a month ago to
1.28 million tonnes, as crude palm oil yields remained in a seasonal low cycle,
although the decline is significantly smaller than a near one-fifth drop seen
in February.
The drops in both output and inventories are expected to
support palm oil futures prices , which have been
stuck below 2,600 ringgit ($840) a tonne since October 2012 after staying well
above that mark for almost two years.
Exports of the tropical oil probably eased 4 percent from a
month ago to 1.34 million tonnes in March. Crude palm oil shipments fell after
the implementation of an export tax of 4.5 percent in March, up from no tax
applied in February.
Despite inching lower, exports were still more than enough
to offset production and imports for the month.
Imports of crude palm oil from top producer Indonesia are
likely to have grown to 80,000 tonnes from 55,410 tonnes the month before,
according to the poll.
FACTORS TO WATCH:
The benchmark third-month contract on the Bursa
Malaysia Derivatives Exchange, which lost 0.8 percent in March and 0.5 percent
so far in April, may gain support from the sinking stock levels.
The edible oil could rise to 2,400 to 2,700 ringgit ($770
to $865) per tonne by the end of May, as weaker production speeds a fall in the
stockpiles, said leading analyst Dorab Mistry.
Export demand may also pick up in coming months because of
attractive prices and plentiful supplies compared to rival edible oils such as
soyoil, Hamburg-based oilseeds analysts Oil World said early this week.
India's imports of palm oil could rise more than 17 percent
in the year to October 2013 to stand at 9 million tonnes, as the edible oil is
the cheapest available, despite an import duty, the country's top importer of
edible oils said.
Malaysia
and Indonesia, the world's top palm oil producers, will keep their crude palm
oil export tax rates for April at 4.5 and 10.5 percent, respectively, unchanged
from March.
