KUALA LUMPUR, June 13 (Xinhua) -- Malaysian research house CGS CIMB said Monday it projected Malaysia's palm oil stock to rise by 5 percent by end-June 2022 and crude palm oil (CPO) price to trend lower in the second half of 2022 due to improved edible oil supplies.
The research house analyst Ivy Ng Lee Fang said in a note that she projected Malaysia's palm oil stock to rise by 5.1 percent month on month to 1.6 million tonnes by end-June 2022, on higher output by 5.3 percent and lower exports by 5 percent month-on-month.
She believes CPO prices could trade in the range of 5,500 ringgit to 6,500 ringgit (1,246 U.S. dollars to 1,472 U.S. dollars) per tonne in June due to the uncertain export supply of sunflower oil from Ukraine and lower-than-usual palm oil export supply from Indonesia, as the Indonesian government tweaks its export policies on palm oil to secure domestic cooking oil supply.
She maintained her average CPO price forecasts for 2022 and 2023 at 5,600 ringgit and 3,800 ringgit per tonne respectively.
According to the Malaysian Palm Oil Board (MPOB), Malaysia's palm oil stock fell 7 percent month on month and 3 percent year on year to 1.52 million tonnes in May on higher exports.
The stock level was 0.6 percent below CGS CIMB forecast of 1.53 million tonnes.
According to Ng, the palm oil inventory in Malaysia remained tight as of end-May, at 19 percent below its historical 10-year average May stock level of 1.88 million tonnes.
Meanwhile, Malaysia's CPO output fell 0.1 percent month on month and 7 percent year on year to 1.46 million tonnes in May, as workers' productivity was impacted by the foreign workers shortage and fewer harvesting days.
The palm oil output for five months fell 0.4 percent year on year to 6.7 million tonnes, which is behind CGS CIMB forecasts for Malaysia's CPO production of 18.9 million tonnes for 2022.
Malaysia's palm oil exports, however, increased 27 percent month on month and 7 percent year on year to 1.34 million tonnes in May driven mainly by Indonesia's decision to ban palm oil exports from April 28 to May 23.
Ng said the palm oil trade flows could shift back to Indonesia in June as the Indonesian government has issued 383 export permits to ship 460,647 tonnes of palm oil this month and introduced a palm oil export accelerating program of up to 1 million tonnes of palm oil. ■