Malaysian palm oil stocks expected to fall in coming months

“Production is slowly coming down, and we expect exports to rise in the coming months on festive season demand,” Malaysian Palm Oil Board (MPOB) director-general Ahmad Parveez Ghulam Kadir said.

Palm oil production in Malaysia, the world’s second largest producer and exporter of the oil, typically tapers off towards year-end following a strong September quarter, according to the 30 September report.

In August, palm oil stocks in Malaysia rose 4.18% month-on-month to 2.2M tonnes, the highest level since December 2023, according to MPOB data.

Meanwhile, The Starreported that world palm oil leader Indonesia’s domestic crude palm oil (CPO) usage had surged in 2024, leading to a drop in exports.

Almost half of the country’s CPO output of 23.8M tonnes was used by the domestic market in 2024 while production fell to 52.7M tonnes, down from 54.8M tonnes the previous year, according to Indonesian Palm Oil Producers Association (GAPKI) figures quoted in the 26 September report.

“The biodiesel mandate is driving up domestic use, with food consumption followed by energy or biodiesel demand,” GAPKI chairman Eddy Martono was quoted as saying.

Speaking during a webinar hosted by the Institute for Development of Economics and Finance (Indef) on 22 September, Martono added that Indonesia was the world’s largest consumer of CPO, accounting for 27% of global use and 57% of global output.

He said global vegetable oil supply could be disrupted, if Indonesian exports were impacted by the country’s domestic biodiesel programme, pushing up prices, and

urged striking a balance between domestic supply and exports.

Indonesia’s palm oil exports dropped last year, after prices rose above other vegetable oils and global buyers turned to cheaper alternatives, The Star wrote.

Although China and India remained the largest importers of Indonesian palm oil, shipments to India dipped from the middle of this year.

Indonesia remains India’s largest supplier of palm oil, shipping around 4.4M tonnes of the commodity in 2024, according to Oil World.

Tags: Indonesia, Crude palm oil, Production, Malaysia, palm oil, stocks, demand