Production rising, but domestic consumption rose too. Malaysia’s CPO production rose in July 10 by 7.0% mom, while exports rose by a smaller 1.8% mom. Despite the larger rise in production versus exports, closing CPO stock levels fell again to 1.40m tonnes in July (from 1.45m tonnes in June), due mainly to higher domestic use (+24.8% mom), potentially due to the upcoming festive season. As a result of the lower
CPO stock levels, stock/usage ratio fell further to 7.5% (from 7.8% in June and versus the 7-year average of 9.1%). However, going forward, notwithstanding any effects of adverse weather, we continue to expect this to potentially start reversing from next month onwards, as production picks up pace towards the peak seasonal production period.
Plantation Sector Update : Largely Affected By External Developments - 11/08/2010
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