KUALA LUMPUR (Reuters) – Malaysia’s palm oil stockpiles likely dropped during March to less than 3 million tonnes and the lowest mark in five months, according to a Reuters survey, as a hefty jump in exports outpaced production gains.

March inventories in Malaysia, the world’s second-largest palm oil producer and exporter, are expected to have fallen 6.4 percent from February to 2.85 million tonnes, the lowest since October 2018, based on the median estimate of eight planters, traders and analysts polled by Reuters.

A confirmed dip in the stockpiles would support benchmark palm oil prices, which hit a three-month low in March before recovering on expectations of firmer demand.

Palm prices closed 1.3 percent higher on Thursday, at 2,204 ringgit ($540.06) a tonne at the close of trade.

The expected ease in inventories was attributed to stocking activities and demand ahead of Ramadan, the Muslim fasting month that begins in early May this year and which sees devotees break day-long fasts with communal feasting. This increases palm oil use for food and cooking.

Importers typically stock up on the edible oil one to two months ahead of the festival.

Palm oil shipments from Malaysia are pegged to come in at 1.63 million tonnes for March, a 23.4 percent rise from the previous month. The monthly gain, if confirmed by official data, would be the strongest in six months.

“The low crude palm oil price environment triggered major restocking – buyers realized CPO prices were undervalued versus other edible oils,” said William Simadiputra, an analyst at DBS Vickers Securities.

Benchmark palm oil prices averaged 2,124 ringgit a tonne in March, the lowest in three months.

Output in March is expected to have risen for its first gain after four months of declines. Survey respondents estimated that output rose 6.8 percent from February to 1.65 million tonnes.

This would be the highest for March for Malaysia in Refinitiv Eikon records back to January 2000.

“Our survey revealed that estates in Sarawak posted lower output on a month-on-month basis while Sabah and Peninsular Malaysia estates posted higher production,” said Ivy Ng, regional head of plantations research at CIMB Investment Bank.

Official palm oil data will be published by the Malaysian Palm Oil Board ‪after 0430 GMT on April 10.

The median results from the Reuters survey put Malaysia’s consumption in March at 270,493 tonnes.

($1 = 4.0810 ringgit)