Malaysia's end-Sept palm oil stocks seen at 11-month high on rising output

JAKARTA, Oct 4 (Reuters): Malaysia's palm oil stocks at the end of September likely rose to the highest since October 2022, amid higher output despite increased exports, a Reuters survey showed on Wednesday.

Inventories were seen rising for a fifth consecutive month to 2.38 million metric tons, up 12.05 per cent from August, according to the median estimate of 11 traders and analysts polled by Reuters.

The world's second-largest palm oil producer was estimated to produce 1.86 million tons of crude palm oil (CPO) in September, a 6.08 per cent increase compared to the previous month and the highest since September 2020.

"Production is better as more workers returned to the field, while now is also the peak production season," a Kuala Lumpur-based trader said.

Exports likely rose by 8.04 per cent to 1.32 million tons, according to the survey.

Higher stocks could continue pressuring prices, the trader said. Bursa Malaysia Derivative's benchmark palm oil contract fell 6.06 per cent in September, the first monthly drop in three months.

"Prices nearby are much lower to forwards, basically pricing in high end stocks. Only better exports can halt the increase in stocks going forward," the trader said, adding that top buyers India and China have high stockpiles after heavy buying in July and August.