Malaysia's exports of crude and refined palm oil in September rose 13.3% month on month to 1.63 million mt, while production fell 6.6% to 1.9 million mt, data released Friday by the Malaysian Palm Oil Board shows.
Palm stockpiles were up 1.8% from August to 2.09 million mt over the same period.
"The production data is on the bearish side as production came out higher than market has expected," said FCStone analyst Budiman Suwardi.
Exports was more or less in line with market expectation but generally, it is considered disappointing, Suwardi added.
"The [Malaysian] government cut export duties to zero for September and October with the expectation that it might boost the exports, but it turns out that the pace was not impressive," he said. "It might be there is a lot of competition from other edible oils and demand [for palm] has remained sluggish."
Indonesia did not remove its 9% export tax on crude palm oil in September, resulting in demand shifting away from Indonesian CPO to Malaysian CPO, industry sources said.
The increase in exports was mainly supported by higher exports to India, up 22.5% on month to 443,667 mt; 186,194 mt to the European Union, higher by up 5.7%; and 164,105 mt to China, up 5.1%.
However, exports to Pakistan dropped significantly by 50.3% from August to 47,556 mt.
Palm sources expect crude palm oil production in October to fall slightly and export to remain sluggish as Indonesia is expected to give Malaysia competition since both countries have zero export duties for October.
"Expect end-stocks to rise in October," said Suwardi.
