Malaysian palm oil stocks rise for 6th straight month

Analysts expect inventory levels to remain high amid a seasonal decline in exports and slowing global demand.

Malaysia’s palm oil inventories continued to rise in November, increasing by 13% month-on-month to 2.84 million tonnes. This marks the sixth consecutive month of growth, according to The Stars, citing a report from HLIB Research.

The key factors were a decline in exports (-28.1% month-on-month to 1.21 million tonnes), which outweighed the decline in production. Global demand also weakened due to the end of pre-holiday restocking and a seasonal reduction in purchases by buyers in colder regions. Production in November amounted to 1.94 million tonnes (-5.3% month-on-month), but remains 19.4% higher than a year earlier.

Analysts expect inventories to peak in November, but their decline will be slow in the coming months due to traditionally weak demand between November and February. Crude palm oil prices have fallen by approximately 10% since the end of October.

Experts previously noted that Malaysia’s palm oil inventories rose to their highest level in over 6.5 years in November – 2.84 million tonnes – due to a decline in exports, while the country’s palm oil production is expected to reach 20 million tonnes for the first time.

Tags: Malaysia, palm oil