Falling Malaysian palm oil inventories could weigh on freights
12kt E.Msia/M.China freights move in tandem with Malaysia palm oil stocks
Malaysia palm oil inventories dipped for the first time in three months by 0.5% MoM to 2.03 mil mt in May, based on figures from the Malaysian Palm Oil Board. Exports in May jumped nearly 11% MoM to 1.37 mil mt, the highest level in five months, as regional demand recovers amid the easing of COVID-19 restrictions. The Malaysian government also announced that crude palm oil, crude palm kernel oil, and processed palm kernel oil will be exempted from export duty from 1 July to 31 December, in a bid to encourage further exports and keep stockpiles under control. (The Star Online) If inventories continue to fall, this could boost palm oil prices, which have risen more than 20% since early May, and is likely to put downward pressure on freights to China.