Malaysia’s palm oil stocks may have risen to a record 3.45 mln tons in September

Malaysia’s palm oil inventories may have increased by around 22% month on month in September to a record 3.45 mln tons, according to market estimates. This would exceed the previous record of 3.22 mln tons set in December 2018.

Since April, the country’s palm oil stocks have risen by almost 50%. The main reason was a sharp increase in production, which jumped 16% in September to 2.11 mln tons, a record level for the month.

Strong supply continues to weigh on prices. Analysts at CGS International expect prices to remain in the range of 4,300–4,500 ringgit/t ($1,050–1,100/t) unless exports to key buyers, particularly India, pick up.

At the time of the estimates, Kuala Lumpur futures were trading near 4,535 ringgit/t ($1,108/t), down from a September peak of 5,049 ringgit/t ($1,234/t). The market is waiting for stronger external demand that could help reduce accumulated stocks.

At the same time, high inventory levels could provide a buffer in 2027 if El Niño negatively affects palm oil production. In the short term, record stocks are weighing on prices, but they could later help cushion a possible tightening in supply.

Tags: Malaysia, palm oil