How to trade Crude Palm Oil Futures ( FCPO ) 10032017

Malaysia Palm Oil Reserves Slump to 6-Year Low as Output Drops

• Stockpiles fall 5.3 percent, output declines 1.4 percent
• Tight supply may curb selling in futures market

Palm oil inventories in Malaysia dropped to the lowest in six years in February as production in the world’s second-largest grower declined for a fifth month.

Stockpiles fell 5.3 percent in February from a month earlier to 1.46 million metric tons, the lowest since January 2011, the Malaysian Palm Oil Board said on Friday. That compares with the 1.48 million tons forecast in aBloomberg survey this week. Crude palm oil production fell 1.4 percent to 1.26 million tons, the lowest since March 2016. February’s output was 21 percent higher than a year earlier. Exports slumped 14 percent to 1.1 million tons, the lowest since February last year.
Traders are watching for signs of how quickly production in Malaysia and Indonesia will rebound this year as oil palms in the top growers recover from El Nino-linked drought. Veteran industry analyst Dorab Mistry predicts benchmark prices to reach 3,000 ringgit ($674) a metric ton in the short term amid tight supply, before dropping to 2,500 ringgit by June-July. LMC International Ltd. Chairman James Fry forecasts a recovery in Malaysian production this year, with inventories exceeding 2 million tons by June.