KUALA LUMPUR: Malaysian palm oil stockpiles are likely to swell in July as production rises after months of slowdown, a Reuters poll showed on Monday.

Stocks at the end of July are expected to climb 5.2 percent to 1.26 million tonnes from 1.20 million tonnes in June, a median estimate of five plantation houses polled by Reuters shows.

The poll showed exports were likely to jump 13.9 percent to 1.08 million tonnes for the whole of July, but not enough to cut into growing reserves. Palm oil output in Malaysia is forecast to rise 9.3 percent to 1.28 million tonnes this month.

“Exports seem to be recovering in July because buyers just cannot delay purchases for the festive season any longer,” said one contributor to the poll.

Palm oil shipments have begun to pick up after slow sales in June, as buyers across Asia lock in supplies for festivals such as the Chinese mid-Autumn festival and the Muslim holy month of Ramadan, both due in September.

Malaysian ringgit was up slightly at 3.4610 ringgit per dollar after last week’s sell off. A weaker ringgit against the dollar makes the ringgit-based commodity much cheaper for overseas buyers.

Palm oil is around five percent off a historic high of 2,764 ringgit reached in early June on the back of robust demand from India and China and dwindling supplies at home. But exports will not be enough to cut into palm oil stockpiles as output recovers on the back of good weather, plantation officials said. The poll showed Malaysia is likely to import 35,000 tonnes of palm oil in July, mostly crude palm oil from Indonesia.

Malaysian crude palm oil futures gained 1.3 percent on Monday, tracking an increase in rival soybean oil prices and supported by a weakening ringgit currency. By the midday break, the benchmark October contract on the Bursa Malaysia Derivatives Exchange rose 33 ringgit, or 1.3 percent, to 2,616 ringgit ($754) per tonne. The contract was up nearly two percent to 2,633 ringgit.

The state-run Malaysian Palm Oil Board will release July palm oil output, export and closing stocks data on August 10. reuters

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