January 2026: Sharp Decline in Malaysian Palm Oil Production and Stocks, While Exports Jump

The latest January 2026 data from the Malaysian Palm Oil Board showed a clearly mixed performance across the industry. Malaysia recorded a simultaneous decline in both production and inventories, while exports exceeded expectations and rose notably, pointing to possible pressure on global supply.

Below is an analytical reading of the main figures in the report.

First: Production Contracts During the Low-Crop Season

Crude palm oil (CPO) production fell sharply by 13.78% to 1.57 million tonnes in January 2026, compared with 1.83 million tonnes in December 2025.

• The decline was driven by lower output across all key producing regions. Sarawak recorded the steepest drop at 19.20%, followed by Peninsular Malaysia at 13.39% and Sabah at 9.28%.
• Palm kernel and crude palm kernel oil production also declined by 13.15% and 5.79%, respectively.

Second: A Jump in Exports

Despite weaker production, Malaysian palm oil exports posted a strong performance, rising by 11.44% to reach 1.48 million tonnes, an increase of 152,000 tonnes from the previous month.

• In contrast, exports of other derivative products declined, with palm kernel oil exports down 44.03% and oleochemicals down 21.66%.
• Biodiesel exports remained broadly stable, with only a marginal increase of 0.33%.

Third: Inventories Erode

As export activity accelerated while production fell, total palm oil inventories dropped by 7.72% to 2.81 million tonnes at the end of January, compared with 3.05 million tonnes a month earlier.

• Crude palm oil stocks: down 8.18%, mainly in Peninsular Malaysia and Sarawak, while Sabah saw a slight increase.
• Processed palm oil stocks: down 7.05%.
• Palm kernel oil stocks: moved against the broader trend, rising sharply by 22.46%, supported by a 41% increase in crude palm kernel oil stocks.

Fourth: Prices and Imports

• Imports: Palm oil imports edged down by 2.93% to around 32,000 tonnes.
• Fresh fruit bunch prices: The average FFB price was almost stable with a slight downward bias, equivalent to RM43.75 per 1% oil extraction rate.

Conclusion: The MPOB report reflects a strong start to the year in terms of external demand, but the seasonal low-output cycle is weighing on strategic inventories. If export demand continues at the same pace over the coming months before the high-production cycle begins, the inventory decline could provide support for futures prices.