Malaysia's palm oil stockpiles to remain high in the near term

KUALA LUMPUR, Aug. 12 (Xinhua) -- Analysts on Tuesday said they expect Malaysia's palm oil stockpiles to remain high in the near term after the country's July stockpile hit a 19-month high of 2.11 million tons.

RHB Investment Bank said in a note that it expects Malaysia's palm oil output to continue ramping up towards the peak season, while demand should also improve, as crude palm oil (CPO) prices are now at a large discount compared with its competitors.

"Going forward, we expect stock levels to continue picking up as production moves towards peak output, staying above the 2 million-ton mark," said the research house.

It also believes CPO prices will taper off in the third quarter, before picking up in the fourth quarter.

Meanwhile, Hong Leong Investment Bank said in a note that the uptrend in palm oil stock levels will likely sustain into August, underpinned by seasonally higher output and weaker price competitiveness, which is likely to cap demand for palm oil.

Maybank Investment Bank also said that it still believes both Malaysia and Indonesia are likely to see better palm oil output in 2025.

"With output anticipated to remain strong the next 2-3 months, CPO prices will likely soften in the near term in order to stimulate demand," said the research house. Enditem