KUALA LUMPUR, Malaysia’s palm oil inventories rose at the end of June but at a much slower than expected pace, as production declined and exports jumped, data by the country’s palm oil board showed on Monday.

Stockpiles at the world’s second largest producer gained

1.9% from the month before to 1.72 million metric tons, hitting a four-month high, Malaysian Palm Oil Board (MPOB) data showed.

That was much smaller than a Reuters forecast of a 10.5% jump.

The MPOB report is a surprise for most market participants and can force them to reassess the supply and demand, as well as trade flows, said Anilkumar Bagani, research head of

Mumbai-based vegetable oils broker Sunvin Group.

Crude palm oil output in June fell 4.6% to 1.45 million tons, MPOB data showed.

Exports rose 8.6% to 1.17 million tons, surpassing cargo surveyors estimates. Intertek Testing Services had estimated June export shipments to decline 6.9%, while Amspec Agri said shipments rose 0.6%.

The biggest surprise was the extent of a rise in imports, Bagani added. MPOB data showed imports surged 67%, partly due to rival Indonesia’s lower palm oil prices.