Lang
Reading the Malaysian Palm Oil Board (MPOB) report
The Malaysian Palm Oil Board has released its monthly industry performance report for March 2026, and the figures point to a sharp shift in market dynamics compared with February. Read together, the numbers describe a market enjoying a clear rebound in output, met by voracious external demand that has pulled heavily on strategic stocks.
The main observations drawn from the report are set out below.
Total crude palm oil (CPO) output grew 7.21% to 1,376,849 tonnes in March. The increase was driven primarily by Sarawak, which posted the largest jump at 14.21%, followed by Sabah at 7.43% and Peninsular Malaysia at 4.29%. The gains extended to other derivatives as well, with crude palm kernel oil production up 11.26%. The improvement reflects a strong return of harvesting and milling activity through March.
The most striking figure in the report is the leap in export volumes. Palm oil exports rose 40.69% to more than 1.55 million tonnes, against 1.1 million tonnes in February. Palm kernel oil exports posted an exceptional 71.88% increase, while oleochemical exports rose 23.42%. The sharp climb points to very strong global demand and, possibly, front-loading by international buyers seeking to secure their requirements.
The sole exception in the export segment was biodiesel, where shipments fell 19.25%.
With export growth (40%+) overwhelming production growth (7%+), domestic inventories were heavily depleted. Total palm oil stocks fell 16.14%, a decline of 436,468 tonnes, to 2.26 million tonnes. The drawdown hit both crude palm oil, down 14.93%, and processed palm oil, down 17.61%. This rapid decline leaves the market in a state of relative tightness, a supportive factor for prices.
On the import side, the Malaysian market dispensed with crude palm oil imports entirely, recording zero tonnes, while processed palm oil imports fell 12.42%. On prices, the market's strong dynamics of high demand and low stocks were reflected in fresh fruit bunch (FFB) prices, which edged higher from 44.69 to 47.77 Malaysian ringgit, a positive signal.
The MPOB's March 2026 report shows an industry in a strong recovery led primarily by export demand. Although producers succeeded in lifting output, global appetite proved far greater, driving a rapid erosion of stocks. Should this trend persist in the coming months, palm oil prices can be expected to face greater upward pressure globally as strategic inventories continue to thin.