By Anuradha Raghu
KUALA
LUMPUR, Nov 10 (Reuters) - Malaysian palm oil inventories rose to their highest
level in 20 months at the end of October, industry data showed on Monday, as
export demand from key buyers dipped and production in the second-largest
producer eased less than expected.
The rise in
stockpiles in the world's No.2 palm grower was just above market estimates, but
could still weigh on prices that are moving up after plunging to over 5-year
lows.
"It's
slightly bearish and may pressure prices in the afternoon, but because it has
been anticipated, the impact won't be that drastic on the market," said a
trader with a foreign commodities brokerage in Kuala Lumpur.
Palm oil
end-stocks in Malaysia rose 3.7 percent from a month ago to 2.17 million
tonnes, industry regulator the Malaysian Palm Oil Board (MPOB) reported on
Monday.
A Reuters
poll had expected stocks to rise to a March 2013 high of 2.16 million tonnes,
with estimates ranging between 2.12-2.22 million tonnes.
Exports of
Malaysian palm oil products in the month of October fell 1.4 percent to 1.61
million tonnes, slightly below expectations for a 3.1 percent fall, the MPOB
said. Crude palm oil production fell 0.2 percent to 1.89 million tonnes.
Ahead of the
MPOB report, the benchmark January contract on the Bursa Malaysia Derivatives
Exchange rose 0.6 percent to 2,209 ringgit ($664) per tonne.
Traders and analysts say external factors like prices
of rival soy and crude oil will also give direction to benchmark Malaysian
futures.
"We are looking at external factors
too. If crude and soybeans continue to slide, it will put a lot of pressure on
our (palm) market," the Kuala Lumpur-based trader added.
Palm production in Malaysia is expected to
weaken as the monsoon season unfurls towards the year-end, bringing thunderstorms
and floods which hinder harvesting and transportation.
($1 = 3.328 Malaysian ringgit) (Editing by Michael Perry)
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