Malaysia’s palm oil stocks could hit a record 3.45 mln tons, surpassing the 2018 peak

Malaysia’s palm oil inventories may have risen 22% m/m in September to 3.45 mln tons, according to a Bloomberg survey of market participants. This would mark a new all-time high, surpassing the previous record of 3.22 mln tons set in December 2018.

The sharp build-up in stocks was driven by stronger-than-expected production. September output may have increased 16% to 2.11 mln tons, which would be the highest level ever recorded for the month.

At the same time, Malaysia’s palm oil exports are estimated to have fallen by around 12% to 1.13 mln tons, a four-month low. The country has recently lost market share due to a wide premium over Indonesian palm oil and high vegetable oil inventories in key importing markets.

The accumulation of record stocks is already putting pressure on prices. Kuala Lumpur palm oil futures fell from a September peak of MYR 5,049/t to around MYR 4,535/t on October 5, while analysts expect prices to remain in the MYR 4,300–4,500/t range in the near term.

Inventories may peak in October before gradually declining as production slows seasonally and exports recover, particularly to India. However, high reserves could help cushion a potential tightening in global supply in 2027 as El Niño affects yields and Indonesia’s biofuel sector absorbs more palm oil.

Tags: Malaysia, palm oil, stock