Malaysian palm oil prices fall on export and stock data, putting pressure on other oil prices

A significant reduction in February export estimates in yesterday’s report from the Malaysian Palm Oil Board (MPOB) sent quotes down 2.8% after Friday’s speculative 3.2% rise.

According to the report, in Malaysia during February:

• Crude palm oil production fell by 4.16% to a 3-year low of 1.19 million tonnes due to floods that complicated harvesting and transportation of the crop,
• palm oil exports fell by 16.27% to a 4-year low of 1 million tons,
• Palm oil stocks decreased by 4.31% to 1.51 million tons, the lowest level since April 2023.

Malaysian palm oil inventories fell for the fifth consecutive month, but a larger drop in exports than production is putting pressure on prices. In addition, crude palm oil (CPO) stocks, which are mainly exported, rose 4.66% to 826,000 tonnes in February.

April palm oil futures on the Bursa exchange in Malaysia fell 2.8% yesterday to 4,499 ringgit/t or $1,018/t (0% for the week, -1.5% for two weeks).

Crude palm oil futures failed to react to the rise in vegetable oil prices in China, triggered by the introduction of import duties on Canadian rapeseed oil and meal, as May soybean oil futures on the CBOT exchange in Chicago fell 2.8% to $930/t yesterday (-10.2% for the month).

According to surveyors, Malaysia reduced palm oil exports by 25.8–38.3% between March 1 and 10 compared to the same period in February, further increasing pressure on quotes.

The stock market crash and the threat of a recession in the US economy will put pressure on oil prices and other commodities in the coming months, which will negatively affect sunflower oil prices in Ukraine.

Tags: palm oil, prices