Malaysian palm oil stocks hit eight-month high in May

Malaysia’s palm oil stocks rose to an eight-month high in May, reaching 1.99 million tonnes, up 6.65% from April, the Malaysian Palm Oil Board (MPOB) said. This was the third consecutive month of stockpiles, driven by a surge in production and imports that outpaced exports, which also hit a six-month high. Crude palm oil (CPO) production rose 5.05% to 1.77 million tonnes in May, while exports rose 25.6% to 1.39 million tonnes.

According to the MPOB, palm oil imports rose from 58,292 tonnes in April to 68,971 tonnes in May. Although the market had expected slightly higher stocks at 2.01 million tonnes, the report still had a bullish impact on palm oil prices, said Anilkumar Bagani, head of research at brokerage Sunvin Group in Mumbai. He stressed that demand, especially from India, a major buyer, is likely to support the market unless production increases significantly in the coming months.

India, seeking to lower food prices and support its local refining industry, halved the basic import tax on crude palm oil to 10% in June. This, coupled with palm oil trading at a discount to soybean oil, has attracted buyers during peak production, said a Mumbai-based dealer with a global trading firm.

Malaysia’s rising palm oil stocks could have an impact on global markets, given its position as one of the world’s largest producers. Demand from India and other countries is expected to continue to support prices unless there is a sharp increase in production. For Ukraine, which competes in the vegetable oil market, this may mean the need to adapt to changes in price dynamics and demand.

Tags: Malaysia, palm oil