Malaysia’s palm oil stocks reach record 3.62 mln tons in October

Malaysia recorded a new all-time high in palm oil inventories in October 2026, as strong production growth outpaced the recovery in export demand. According to the Malaysian Palm Oil Board (MPOB), stocks increased by 3.15% from September to 3.62 mln tons, surpassing the previous record of 3.51 mln tons. Inventories have now risen for seven consecutive months, putting further pressure on the domestic market and benchmark futures, which have fallen to their lowest levels in more than eight months.

Crude palm oil production in Malaysia increased by 1.74% in October to 2.15 mln tons, compared with the previous record of 2.12 mln tons in September. Output rose for the fifth consecutive month, contributing to the continued accumulation of domestic inventories. Strong production remains the main driver of stock growth despite a noticeable recovery in international demand.

Meanwhile, Malaysia’s palm oil exports surged by 55.8% in October to 1.71 mln tons, ending two consecutive months of declining shipments. This marked the highest monthly export volume in a year. However, even such a substantial increase in shipments was insufficient to prevent inventories from rising. Actual figures were nevertheless more favorable than market expectations, which had projected stocks of 3.75 mln tons, production of 2.2 mln tons and exports of 1.6 mln tons.

Sunvin Group analysts note that lower-than-expected inventories could trigger a short-term recovery in futures prices as traders cover short positions. However, abundant supplies are likely to continue limiting the potential for price gains. According to analysts, Malaysian palm oil needs to trade at a discount of $100–120/ton to soybean oil to attract additional demand. Indonesia is also adding competitive pressure, as its lower export duties make Indonesian palm oil more attractive compared with Malaysian supplies.

Despite record-high inventories, future market developments will depend on production prospects across Southeast Asia. Analysts estimate that Malaysia could end 2026 with palm oil stocks exceeding 3 mln tons, which would continue to weigh on prices. Meanwhile, the forecast El Niño-related drought could negatively affect oil palm yields and reduce regional production, particularly in Indonesia. This could lead to changes in the supply-demand balance in the coming periods.

Tags: palm oil, Malaysia