Malaysia palm oil production and exports are expected to be higher in 2025/26, according to a report by the US Department of Agriculture (USDA).
The increased estimate for Malaysian palm oil production in 2025/26 to 19.4M tonnes was driven by expectations of normal weather conditions and a forecast expansion of the planted area, the USDA’s 10 July Foreign Agricultural Service (FAS)’s Malaysia: Oilseeds and Products Update said.
The increase in the projected planted area to 5.15M ha for both 2024/25 and 2025/26 was in line with Malaysian Palm Oil Board (MPOB) data and accounted for areas cultivated by smallholders who were not registered with the MPOB, representing between 1%-2% of all areas harvested.
The palm oil export estimate for 2025/26 was revised from 15.3M tonnes to 16M tonnes due to an increase in production estimates and a maintained consumption estimate.
Palm oil is forecast to be at a price discount in 2025/26 as prices had recently settled to average levels, increasing the oil’s price competitiveness compared to other vegetable oils, the report said.
“Since its peak in December 2024, palm oil prices have been on a downward trend, with May prices at the lowest since August 2024. The price reduction is mainly attributed to improved supply conditions and rising competition from other edible oils,” the USDA said.
The estimate for palm oil stocks in the period was increased to 2.3M tonnes due to higher beginning stocks and production, which were expected to outpace increased revision to exports.
For palm kernel oil (PKO) production, the USDA increased its 2025/26 forecast to 2.11M tonnes and its 2024/25 estimate to 2.10M tonnes.
“The increase in estimates for both [years] is attributed to strong overall palm kernel output in 2024/25 and the assumption of normal weather conditions,” the USDA said.
With higher supply due to increased PKO production and relatively lower prices compared to coconut oil, the total estimate for domestic PKO consumption in 2025/26 was forecast to rise to approximately 1.24M tonnes.
The estimate for PKO imports 2025/26 was forecast to decline due to several factors, including a projected increase in local production and imports, and an upward revision of ending stocks estimates in 2024/25, resulting in larger beginning stocks in 2025/26.
The export estimate for PKO in the period was increased due to a combination of excess domestic supply and lower PKO prices compared to main competitor oils.
“The estimate for [PKO] ending stocks for 2025/26 is lowered due to an increase in forecast of exports and domestic consumption that outpaced the growth in beginning stocks and decline in import projection,” the USDA said.
