Analysts expect palm oil prices to fall amid rising stockpiles

Rising palm oil supplies in the coming months are likely to keep a lid on palm oil prices, which are already under pressure as Malaysian stockpiles rose to a 19-month high, analysts say, The Edge Malaysia reported.

Data released on Monday showed stockpiles increased for the fifth month in a row, reaching 2.11 million tonnes in July as steady production growth offset higher exports.

Production in Malaysia, the world’s largest palm oil producer after Indonesia, is expected to continue rising and peak in September-October, keeping inventories high, according to BIMB Securities and Apex Securities. Stockpiles will only start to decline from October onwards as India steps up stock replenishment ahead of the festive season and production slows with the onset of the northeast monsoon towards the end of the year.

Prices of the edible oil, used in everything from ice cream to shampoo, have been hovering above RM4,000 a tonne since early July. The latest three-month contract price on the Malaysia Stock Exchange was RM4,372, a benchmark for all its peers.

On 11/08/2025, palm oil FOB Malaysia for August delivery settled at $1,062.16 a tonne, up $27.36 a tonne from $1,034.80 a tonne on 08/08/2025, according to OleoScope. This is the highest level of the price.

Palm oil is also a broad substitute for soybean oil, whose prices have remained elevated amid strong demand for biofuels in the US and concerns over its production.

Earlier it became known that palm oil reserves in Malaysia will reach a nearly two-year high by the end of July.

Tags: prices, Malaysia, palm oil, stocks