KUALA LUMPUR : Malaysia’s palm oil inventories likely rebounded at the end of October, lifted by a plunge in exports amid shrinking output.

Palm oil stockpile at the world’s second largest producer is pegged to rise 3.4per cent to 1.81 million tonnes, according to a median estimate of nine planters, traders and analysts polled by Reuters.

Production is seen declining 0.98per cent to 1.69 million tonnes. It likely fell for a second consecutive month to its lowest in three months, as the peak production season ends.

The decline, much lower than historical trends, reflects the ongoing severe shortage of foreign workers, ageing trees due to slow replanting, slower new planting rates, and lower fertiliser input due to logistics issues, Ivy Ng, regional head of plantations research at CGS-CIMB Research, said in a note.

Exports likely slumped 11.7per cent to 1.41 million tonnes, as data from cargo surveyors showed slower shipments to top buyers India and the European Union.

“We suspect the weaker exports could be partly due to the high prices and low supply from Malaysia,” Ng said.

Malaysia’s benchmark crude palm oil prices hit record highs of 5,220 ringgit (US$1,255.71) a tonne in October due to supply tightness in global edible oils.

The Malaysian Palm Oil Board will release official data on Nov. 10.

Breakdown of October estimates (in tonnes):

Range Median

Production 1,669,665-1,950,000 1,687,000

Exports 1,389,732-1,770,000 1,410,000

Imports 0-85,000 69,000

Closing stocks 1,752,520-2,000,000 1,806,223

* Official stocks of 1,746,520 tonnes in September plus the above estimated output and imports yield a total October supply of 3,656,505 tonnes. Based on the median of exports and closing stocks estimate, Malaysia’s domestic consumption in October is estimated to 312,592 tonnes.

(US$1 = 4.1570 ringgit)

(Reporting by Mei Mei Chu; Editing by Rashmi Aich)