Malaysia’s palm oil stocks hit a record high

Malaysia’s palm oil stocks are estimated to have risen to a record 3.45 mln tons in September, up 22% from August and above the previous all-time high recorded in 2018. At the same time, crude palm oil production increased by 16% to 2.11 mln tons.

The buildup in inventories was driven by weaker exports. Malaysia’s palm oil shipments fell by 12% in September to 1.13 mln tons. High supply and softer external demand are keeping futures in Kuala Lumpur under pressure.

Palm oil futures are trading around MYR 4,535/t, or about $1,110/t. According to CGS International, prices are likely to remain under pressure in a range of MYR 4,300–4,500/t, equivalent to roughly $1,030–1,108/t.

Additional pressure is coming from stronger competition from Indonesia, which continues to gain market share in global trade. At the same time, demand could receive some support from India, which has stepped up purchases ahead of Diwali and following cuts in import duties on vegetable oils.

Looking ahead, production growth could slow due to the impact of El Niño. USDA has raised its forecast for Malaysia’s palm oil output to 20.2 mln tons on the back of more effective plantation management, but analysts expect inventories to remain near record levels at least through mid-2027.

Tags: Malaysia, palm oil, stocks