Required Report - public distribution

**Date:** 11/25/2005

**GAIN Report Number:** MY5047

MY5047

**Malaysia**

**Oilseeds and Products**

**Update (Nov)**

**2005**

**Approved by:**

![](media/image1.wmf)Jonathan Gressel

U.S. Embassy, Kuala Lumpur

**Prepared by:**

Raymond Hoh

**Report Highlights:**

Malaysia\'s crude palm oil (CPO) production declined 2.2 percent to 1.4
MT in October 2005. Carry-over stock level at the end of the October
increased to 1.5 MMT reflecting the bigger carry-in stock at the
beginning of the month. Weaker overseas demand influenced the average
local CPO price to decline to RM1,428 (US\$378)/MT in November, 2005.
Preliminary official PO exports rose from 1.2 MMT in September to 1.21
MMT in October.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Kuala Lumpur \[MY1\]

\[MY\]

Table of Contents

[Executive Summary 3](#executive-summary)

[Annual Situation 4](#annual-situation)

[Quarterly Outlook for Palm Oil 5](#quarterly-outlook-for-palm-oil)

[Production 6](#production)

[Prices 7](#prices)

[Stock 8](#stock)

# Executive Summary

Production

The Malaysian Palm Oil Board (MPOB) reported that total crude palm oil
(CPO) production declined by 2.2 percent to 1.4 MMT in October 2005.
While East Malaysia's production rose 5.3 percent, output in the
Peninsula Malaysia declined by 8.5 percent. Compared to October 2004,
output during October 2005 was 2.9 percent higher. With Post's forecast
of 4.1 MMT CPO output for the Oct-Dec quarter, total CPO for CY2005
should reach 15.3-15.4 MMT.

Price

Weaker overseas demand resulted in a drop in local CPO prices during the
month of November. The monthly average CPO price declined from
RM1,452/MT in October to RM1,428/MT in November 2005. For comparison,
the average CPO price for November 2004 was RM1,475/MT. The
Refined/Bleached/Deodorized (RBD) Palm Oil FOB average price also
dropped from US\$401/MT in October to US\$391/MT in November.

Stocks

Higher carrying in stocks at the beginning of October offset the small
drop in CPO output and a small increase in PO exports, resulting in a
small increase in carryout stocks at the end of the month. PO exports
slows during November and our earlier forecast of 1.55 MMT of carry-over
stocks at the end of December seems within reach.

Trade

Preliminary official PO exports increased marginally from 1.2 MMT in
September to 1.21 MMT in October. PO exports weakened slightly in
November.

Exchange Rate: US\$1.00 = RM3.774 (Oct 23, 2005); RM3.778 (Nov 25, 2005)

# Annual Situation

PS&D table for palm oil remains unchanged since the submission of the
Oilseed Update Report MY5045.

+--------------------+--------------+----------------+-----------------+
|                    | Revised      | Prelim         | Forecast        |
|                    |              |                |                 |
|                    | 2003/04      | 2004/05        | 2005/06         |
+--------------------+--------------+----------------+-----------------+
| (1,000 tons)       |              |                |                 |
+--------------------+--------------+----------------+-----------------+
| Beg Stock          | 975          | 1,332          | 1,436           |
+--------------------+--------------+----------------+-----------------+
| Production         | 13,420       | 15,194         | 15,500          |
+--------------------+--------------+----------------+-----------------+
| Imports            | 773          | 430            | 400             |
+--------------------+--------------+----------------+-----------------+
| Total Supply       | 15,168       | 16,956         | 17,336          |
+--------------------+--------------+----------------+-----------------+
| Exports            | 11,602       | 13,563         | 13,740          |
+--------------------+--------------+----------------+-----------------+
| Domestic Use       | 2,234        | 1,957          | 2,396           |
+--------------------+--------------+----------------+-----------------+
| Ending Stock       | 1,332        | 1,436          | 1,200           |
+--------------------+--------------+----------------+-----------------+

# Quarterly Outlook for Palm Oil

  ------------------------- ----------- ----------- ----------- ------------
                            2004 1/     2005 2/     2004 1/     2005 2/

                            Jul-Sep     Jul-Sep     Oct-Dec     Oct-Dec

                            (1,000                              
                            tons)                               

  Beg Stocks 3/             1,212       1,185       1,333       1,436

  Prod- Pen. Mal            2,339       2,330       2,173       2,370

  \- East Mal               1,742       1,758       1,763       1,720

  \- Total                  4,081       4,088       3,936       4,090

  Imports                   161         116         108         80

  Total Supply              5,454       5,389       5,377       5,606

  Exports 4/                3,590       3,445       3,410       3,560

  Dom Disap 5/              531         508         477         500

  End Stocks                1,333       1,436       1,490       1,546
  ------------------------- ----------- ----------- ----------- ------------

1/ Revised;

2/ Forecast;

3/ Stocks include crude and refined for all Malaysia;

4/ Exports exclude shipments of fatty acid oil distillate

and all intra-Malaysia trade;

5/ Residual

# Production

+------------------------+-----------+----------+----------+----------+
|                        | 2004      | 2004     | 2005     | 2005     |
+------------------------+-----------+----------+----------+----------+
|                        | Oct       | Jan-Oct  | Oct      | Jan-Oct  |
+------------------------+-----------+----------+----------+----------+
| (In 1,000 MT)          |           |          |          |          |
+------------------------+-----------+----------+----------+----------+
| CPO:                   |           |          |          |          |
+------------------------+-----------+----------+----------+----------+
| Pen. Malaysia          | 759       | 6,679    | 708      | 7,224    |
+------------------------+-----------+----------+----------+----------+
| East Malaysia          | 603       | 4,722    | 693      | 5,435    |
+------------------------+-----------+----------+----------+----------+
| \- Total /1            | 1,362     | 11,401   | 1,401    | 12,659   |
+------------------------+-----------+----------+----------+----------+
|                        |           |          |          |          |
+------------------------+-----------+----------+----------+----------+
| Palm Kernel:           | 353       | 2,993    | 365      | 3,378    |
|                        |           |          |          |          |
| Malaysia               |           |          |          |          |
+------------------------+-----------+----------+----------+----------+
|                        |           |          |          |          |
+------------------------+-----------+----------+----------+----------+
| Palm Kernel Oil:       | 165       | 1,342    | 162      | 1,564    |
|                        |           |          |          |          |
| Malaysia               |           |          |          |          |
+------------------------+-----------+----------+----------+----------+
|                        |           |          |          |          |
+------------------------+-----------+----------+----------+----------+
| Palm Kernel Meal:      | 189       | 1,550    | 183      | 1,780    |
|                        |           |          |          |          |
| Malaysia               |           |          |          |          |
+------------------------+-----------+----------+----------+----------+

1/ Revised

# Prices

(Crude delivered basis; RBD Oils in Bulk, FOB Malaysia)

+--------------------+----------+-------------+----------+------------+
|                    | Local    | RBD Palm    | RBD      | RBD        |
|                    | Crude    | Oil         | Olein    | Stearin    |
+--------------------+----------+-------------+----------+------------+
|                    | RM/MT    | US\$/MT     | US\$/MT  | US\$/MT    |
+--------------------+----------+-------------+----------+------------+
| ######## Nov 2004  | 1,475    | 405         | 421      | 358        |
+--------------------+----------+-------------+----------+------------+
| ######## Dec       | 1,408    | 392         | 402      | 350        |
+--------------------+----------+-------------+----------+------------+
| ######## Jan 2005  | 1,331    | 363         | 376      | 336        |
+--------------------+----------+-------------+----------+------------+
| ######## Feb       | 1,299    | 351         | 364      | 324        |
+--------------------+----------+-------------+----------+------------+
| ######## Mar       | 1,421    | 392         | 402      | 349        |
+--------------------+----------+-------------+----------+------------+
| ######## Apr       | 1,428    | 389         | 401      | 355        |
+--------------------+----------+-------------+----------+------------+
| ######## May       | 1,410    | 389         | 401      | 355        |
+--------------------+----------+-------------+----------+------------+
| ######## Jun       | 1,398    | 384         | 395      | 348        |
+--------------------+----------+-------------+----------+------------+
| ######## July      | 1,408    | 388         | 398      | 344        |
+--------------------+----------+-------------+----------+------------+
| ######## Sep       | 1,381    | 385         | 398      | 330        |
+--------------------+----------+-------------+----------+------------+
| ######## Oct 1/    | 1,452    | 401         | 413      | 341        |
+--------------------+----------+-------------+----------+------------+
| ####               | 1,428    | 391         | 401      | 342        |
| #### Nov (till 23) |          |             |          |            |
+--------------------+----------+-------------+----------+------------+

1/ Revised

Exchange Rate: US\$1.00 = RM3.774 (Oct 23, 2005); RM3.778 (Nov 25, 2005)

# Stock

  ------------------------ ----------- ----------- ------------ -----------
                           2004        2005        2005         2005

                           Oct         Aug         Sep 1/       Oct

  (In 1,000 MT)                                                 

  Crude P. Oil             756         667         788          839

  Processed PO             608         668         648          658

  \- Total PO              1,364       1,335       1,436        1,497

                                                                

  Palm Kernel              156         125         155          177

  P. Kernel Oil            194         207         244          260
  ------------------------ ----------- ----------- ------------ -----------

1/ Revised