Malaysia’s palm oil stocks hit over six year high in November on weak exports, robust output

Malaysia’s palm oil stocks rose in November to a more than 6-1/2-year high, as weaker exports coincided with the second-highest production ever recorded for the month, data from the industry regulator showed on Wednesday.

Rising inventories in the world’s second-biggest producer of the tropical oil could weigh on benchmark Malaysian futures, which are trading near a five-month low.

Malaysia’s palm oil stocks in November rose 13% from the previous month to 2.84 million metric tonnes, the highest since March 2019, the Malaysian Palm Oil Board (MPOB) said.

Crude palm oil production fell 5.3% in November from October to 1.94 million tonnes, but was still the highest November production recorded since 2017, the MPOB said.

Meanwhile, palm oil exports plunged 28.1% to 1.21 million tonnes, snapping two consecutive months of gains.

A Reuters survey had forecast inventories at 2.66 million tons, with output seen at 1.98 million tons and exports at 1.44 million tons.

Given the current production momentum, Malaysia’s total output is likely to exceed 20 million tonnes for the first time in 2025, which could put downward pressure on prices, said Anilkumar Bagani, research head of Mumbai-based vegetable oil broker Sunvin Group.

Over the past 25 years, December output has fallen by an average of 8.9% from the previous month.

Malaysia’s December exports are expected to remain under pressure as Indonesia supplies palm oil at lower prices following Jakarta’s cut to export levies, a Mumbai-based dealer at a global trade house said.

Indonesia has cut the export tax on crude palm oil shipments in December to US$74 per tonne, down from US$124 in November.