Malaysia’s palm oil stocks hit 6½-year high in October as output surges — MPOB

Malaysia’s palm oil stocks rose for an eighth consecutive month to a 6½-year high by the end of October, as the biggest output in a decade outweighed a jump in exports, data from the industry regulator showed on Monday.

Rising inventories in the world’s second-biggest producer of the tropical oil could weigh on benchmark Malaysian futures, which are trading near their lowest level in four months.

Malaysia’s palm oil stocks rose 4.44% to 2.46 million tonnes in October from the previous month, the highest since April 2019, the Malaysian Palm Oil Board (MPOB) said.

Crude palm oil production rose 11.02% month-on-month to 2.04 million tonnes, its highest since August 2015, while palm oil exports climbed 18.58% to 1.69 million tonnes, marking their strongest rate of growth in a year, the MPOB said.

Lower exports in the first 10 days of November and higher palm oil production in the first week are likely to limit upside in prices, said Anilkumar Bagani, research head of Mumbai-based vegetable oil broker Sunvin Group.

“It looks like palm oil stocks in Malaysia have finally peaked,” said a New Delhi-based dealer with a global trade house.

“Production should start slowing down from November, and the big factor to watch will be export demand, which could pick up since palm oil is now cheaper than other vegetable oils,” the dealer said.