Indonesia's palm oil stockpiles likely fell in May as exports increased because of higher consumer demand ahead of the start of the Islamic holy month of Ramadan, a Reuters survey showed. Crude palm oil (CPO) production in Indonesia, the world's top producer of the vegetable oil, likely rose in May to 3.38 million tonnes from 2.9 million tonnes in April, according to the median estimate in a survey of three industry associations and a state palm research firm.
Exports of Indonesian CPO were estimated to have increased last month to 2.38 million tonnes, from 2.16 million tonnes in April. Domestic consumption was also forecast to have risen to 924,500 tonnes in May, from 867,000 tonnes in the previous month, according to the survey.
Exports and domestic demand likely rose as consumers bought up palm oil supplies before Ramadan began on May 25. The Islamic holy month is marked by fasting during the day followed by feasts at night, spurring palm demand for cooking. The rising Indonesian consumption likely pushed down domestic palm inventories to 1.09 million tonnes in May according to the survey, from 1.31 million tonnes previously. Indonesian Palm Oil Association (GAPKI) data showed the country exported 2.57 million tonnes of palm oil and palm kernel oil in April. The group's May data is not yet available.