Malaysia palm oil stockpile to remain low until 2Q 2025 – Aminvestment

Malaysia’s palm oil stockpile is expected to remain low until the second quarter of 2025 (2Q 2025), as crude palm oil (CPO) production fell by 9.8 per cent month-on-month (m-o-m) to 1.6 million tonnes in November, from 1.79 million tonnes in October, said AmInvestment Bank Bhd.

In a research note, the bank attributed the decline in CPO output to seasonal and weather-related factors.

“After peaking in the 3Q, fresh fruit bunch (FFB) yields normally soften until 2Q of the following calendar year, further compounded by wet weather in 4Q, which disrupts harvesting activities.

“CPO output in Peninsular Malaysia slid by 9.6 per cent m-o-m to 875,818 tonnes in November; Sabah’s CPO production fell by 9.7 per cent to 392,760 tonnes, and Sarawak’s declined by 10.4 per cent to 352,716 tonnes,” the bank noted.

For the first 11 months of 2024 (11M 2024), Malaysia’s CPO production increased by five per cent to 17.9 million tonnes compared to the same period in 2023, driven by an increase in estate workers.

However, the bank said that the CPO output rose across all states in 11M 2024 except Sabah, which saw a 5.2 per cent decline, and Sarawak, which registered a 1.2 per cent decrease.

“We attribute Sabah’s poor FFB yields to flooding and a tree disease,” it said.

AmInvestment Bank projected average CPO prices of RM4,250 per tonne for pure Malaysian planters and RM3,950 per tonne for those with Indonesian operations in 2025.

The bank maintained its “overweight” call on the plantation sector with Johor Plantation Group (JPG) as its top pick.

Tags: output, CPO, stockpile, FFB, fresh fruit bunch, prices, Crude palm oil, Production, Malaysia, palm oil, yield