Lang
Crude palm oil prices are expected to remain under pressure in the near term as strong seasonal production pushes stocks to their highest level in nearly two years, according to a sector report from Maybank IBG.
The Malaysian Palm Oil Board (MPOB) reported that August 2025 stocks rose 4% month-on-month (MoM) and 17% year-on-year (YoY) to reach 2.20 million tonnes, marking a 20-month high. The build-up was driven by higher output of 1.86 million tonnes (+2% MoM, -2% YoY), even as exports remained weak at 1.32 million tonnes (flat MoM, -14% YoY).
Nevertheless, domestic consumption continued to exceed expectations, reaching 490,000 tonnes (+6% MoM, +103% YoY), while imports fell to 50,000 tonnes (-20% MoM).
Preliminary shipment survey data from Intertek Testing Services (ITS) and Amspec show that Malaysia's exports for the first ten days of September are trending weaker, ranging between 415,000 and 477,000 tonnes. On a calendar basis, September exports are projected to come in between 1.2 million and 1.43 million tonnes, below the historical monthly average of 1.5 million tonnes.
The report stated: "Assuming this export trend continues, we expect MPOB stocks to climb above 2.3 million tonnes by the end of September."
Weather-related risks that had raised concerns of transboundary haze in July have since eased. The ASEAN Specialised Meteorological Centre (ASMC) recently lowered the haze risk to Level 1 ("dry season"), citing a significant drop in the number of hotspots in key palm-growing regions.
Meanwhile, the El Niño–Southern Oscillation (ENSO) remains neutral, supporting stable growing conditions.
In the United States, weather conditions have also been favourable. The US Department of Agriculture (USDA) is forecasting a record corn crop of 16.7 billion bushels (+13% YoY) on higher yields and planted area, while the soybean crop is expected to be slightly lower at 4.29 billion bushels (-2% YoY) due to reduced planted area, despite a record yield.
The strong US harvest outlook is expected to intensify competition among vegetable oils, keeping crude palm oil prices under pressure.
Analysts are maintaining a "neutral" rating on the plantation sector, noting that while the stock build-up will weigh on prices in the near term, crude palm oil's competitive discount to other edible oils should help stimulate demand.
Source: Al Mal Forum