Malaysia's Palm Oil Output Growth To Decelerate

KUALA LUMPUR, Feb 13 (Bernama) -- Malaysia's palm oil output growth for this year is expected to decelerate, on higher-than-expected planting over the past three years, says HwangDbs Vickers Research. In a statement here on Monday, the research firm said January's palm oil output of 1.287 million tonnes was in line with its expectation of 1.214 million tonnes. It said the month-on-month (m-o-m) decline was largely seasonal although the year-on-year (y-o-y) growth on output was up 22 per cent. "This indicates the La Nina impact was not as severe as initially feared," it added. HwangDbs Vickers expects the palm oil output for next month to further drop by 8.2 per cent m-o-m to 1.256 million tonnes, as February normally records the lowest output. The increase in export volume of palm oil of 1.381 million tonnes however, was smaller than its expectation of 1.52 million tonnes as demand from China was weak. This pushed the inventory back to above two million tonnes, said the research house. Despite the below-than-expected export volume in January, it expects a seasonal recovery in February, to 1.415 million tonnes. Meanwhile, HwangDbs Vickers continues to expect weaker crude palm oil prices in the second half of the year, mainly account of lingering inventories since the end of last year. Among its top picks are Sime Darby and First Resources (both are oil palm plantation companies) on expectations of decent earnings for the fourth quarter last year, as well as longer-term growth prospects. -- BERNAMA