Citigroup Malaysia Plantations - MPOB Statistics: February Stock Down 10.9%

 CPO production down 12.5% MoM — February 2010 production fell 12.5% MoM to 1.16m tonnes. The MoM decline is not surprising due to seasonal factors and a shorter working month in Feb.

 Exports fell 11.6% MoM — Palm oil exports declined 11.6% MoM to 1.29m tonnes. The decrease came mainly from Pakistan (-43.3% to 127,176 tonnes), China (-20.3% to 315,355 tonnes) and the US (-29% to 59,437 tonnes). However, there was an increase in exports to the Netherlands (78.9% to 150,325 tonnes), Egypt (43.4% to 70,066 tonnes) and India (19.5% to 122,570 tonnes).

 Exports up 5.4% YTD — On a YTD basis, the increase came from China (54.1% to 711,152 tonnes) and the Netherlands (49.6% to 234,376 tonnes). However, there was a drop in exports to India (-31.4% to 225,117 tonnes) and Pakistan (-14.3% to 351,453 tonnes).

 Stock usage ratio at historical average levels — Closing stock in February fell by 10.9% MoM to 1.79m tonnes, the lowest level in 5 months but this is within expectations as we are in a seasonally lower production period. The stock usage ratio rose marginally to 1.38x in February 2010 from 1.37x in January 2010. The historical stock usage ratio is 1.38x (data since 1983).

 No major surprises in Feb numbers — The decline in production and exports is within expectations. We expect production and exports to improve in March and for stock usage ratio to decline.