Malaysian palm oil production not only moved higher for the first time in 7 months, but also jumped 33% in March after stumbling in Jan and Feb due to monsoon flooding. Output hit 1,494,837 metric tons and although it was up significantly from February’s production, it was almost identical to the 1,497,145 MT seen in March of 2014.

March output exceeded analyst expectations, which were looking for a more modest 18% growth. The 33% received, was the largest month over month increase in data going back through 2010. Palm prices initially pushed lower on the news, hitting a four-month low of 2,092 ringgit per ton before recovering to 2,122/ton.

A healthy surge in export activity late in March helped to buoy palm prices. March export activity was up 22% from February. However, that is a long way from being strong, as February’s export activity was the lowest on record going back 8 years through 2008. March’s exports, although higher, were 5% less then what were seen in March of 2014. The rise in exports also helped to limit the increase in stocks, which were up 7% and at their highest level since December.

Crude palm oil (CPO) exports are expected to drop off a bit after Malaysia re instituted its 4.5% export tariff on CPO this month and Indonesia held theirs at 0%. However, with prices currently below 2,250 ringgit/ton, should they stay below this level, Malaysia’s export tariff could find itself waived again in May.

Cargo surveyor Interteck Testing released their export data for the first 10 days of April, which encouragingly showed overall palm exports to be 24% higher. With the CPO export tariff back in place, April CPO exports are down 78%. However, refiners are better off with the tax back in place and RBD palm oil and palm olein demand increased 51% and 13% respectively.