22 February 2011 06:05 [Source: ICIS news]SINGAPORE (ICIS)--Malaysia’s crude palm oil (CPO) exports rose 17.8% year on year to 179,327 tonnes in January as regional buyers shored up inventories even though production in the country fell 20% from a year ago, market sources said on Tuesday.
CPO production in January fell to 1.06m tonnes from the same period a year ago because of flooding across the country, a Malaysian producer said.
“The continuous flooding in Johor and Sabah and other states since the last quarter have produced lower-yield palm fruits and have contributed to tighter supply,” the producer added.
The bad weather brought about by the La Nina weather system was largely thought to be the reason for low palm fruit yield since the last quarter, a Singapore-based trader said.
The Malaysian producer said that industry players widely saw La Nina as the cause for a fall in palm oil production.
Meanwhile, “global concerns over the availability of CPO have also caused buying activity to increase, thereby increasing exports in January as compared to last year,” a Malaysia-based trader said.
Market sources said that CPO exports in February could remain firm as buyers were likely to shore up inventories in anticipation of supply shortages in the coming months because of lower yields.
Prices of CPO were assessed to be at ringgit (M$) 3,726/tonne ($1,222/tonne) during morning trade on 22 February.
($1 = M$3.05)
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