Malaysia palm oil reserves seen slipping to 2-year low

Kuala Lumpur

PALM oil inventories in Malaysia probably shrank to the lowest in almost two years as demand rose ahead of Muslim festivals and the lingering effect of El Nino hindered a recovery in production.

Stockpiles fell 7.8 per cent to 1.66 million tonnes in May from a month earlier, dropping for a sixth month to the smallest since June 2014, going by the median of 10 estimates in a Bloomberg survey of planters, traders and analysts. Output rose 3.8 per cent to 1.35 million tonnes, slowing from a 17 per cent gain in March, while exports climbed 14 per cent to 1.32 million tonnes. The Malaysian Palm Oil Board will release official data by June 10.