Malaysia forecasts decline in palm oil production and growth in exports in 2026

The Malaysian Palm Oil Council (MPOC) forecasts that the country’s palm oil market will stabilize in 2026, driven by stronger export growth and lower production volumes, as demand for the tropical product rises as competitive prices return.

MPOC forecasts palm oil exports to rise to 16.2 million tonnes in 2026, while production will decline to 19.7 million tonnes as palms enter a natural dormancy phase following stable growth in 2025.

This combination of factors is expected to contribute to a healthier supply and demand balance and a gradual restocking.

In its latest report, the MPOC reported that Malaysian palm oil production in November fell 5.3% month-on-month to 1.93 million tonnes, while exports fell to 1.21 million tonnes due to lower demand from sub-Saharan Africa and the European Union.

The MPOC notes that EU demand declined following confirmation of a 12-month delay in the adoption of the EU Renewable Energy Regulation, reducing the need for precautionary stockpiles.

The decline in exports has pushed palm oil stocks to 2.83 million tonnes, the highest level since March 2019.

However, the agency insists that this should be viewed as a short-term imbalance rather than a structural oversupply, especially given that Indonesian palm oil stocks are expected to decline by the end of the year. Previously, it was reported that the rate of decline was approximately 10% per month.

Going forward, MPOC expects palm oil prices to remain in the range of RM3,800 to RM4,100 in January, supported by seasonally lower production and improved demand ahead of the Chinese New Year and Ramadan, even though ample oilseed inventories limit upside potential in the short term.

Tags: Malaysia, palm oil