KUALA LUMPUR (April 4): Palm oil stockpiles in Malaysia climbed for the first time in six months as output bounced back, according to a survey, allaying worries that adverse weather will continue to hit supply in the second-biggest grower.

The estimate may put further pressure on benchmark palm oil futures, which have plummeted about 16% in Kuala Lumpur from a peak in November. The figures may disappoint some bullish investors who were betting that heavy rains and floods in the Southeast Asian nation earlier this year would hamper harvesting and transportation activities for a longer period.

Malaysian inventories rose 3.3% from a month earlier to 1.56 million tonnes in March, according to the median of 11 estimates in the Bloomberg survey of plantation executives, traders and analysts.

Production is expected to have jumped 10% to 1.31 million tonnes, the biggest advance since July and a recovery after falling for six months. Exports probably rose 3% to 1.03 million tonnes, the survey showed. The Malaysian Palm Oil Board will publish its data on April 10.

Production and stockpiles are expected to rise further in the April-June quarter, said Nagaraj Meda, chairman and managing director at TransGraph Consulting, a commodities market researcher. Stockpiles may increase by 200,000 tonnes to 400,000 tonnes during the period, he said, adding that fresh fruit bunch yields would be in focus going forward.

Palm oil prices sank nearly 3% Friday to trade at RM4,363 a tonne by the midday break, the biggest intraday drop in more than two weeks. Concerns about higher Malaysian supplies and flattening exports weighed on futures, as well as worries that wide-ranging US tariffs could dampen the global economy, according to Chandran Sinnasamy, a futures broker at CGS International Futures in Kuala Lumpur.

More from the survey:

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