Malaysia's palm oil sector saw a moderate decline in crude palm oil output during June 2025, while refined oil production and stocks rose in some regions, according to the latest reports from the Malaysian Palm Oil Board (MPOB).
Weaker Output
- Production of crude palm oil (CPO) fell by 4.48% month-on-month, from 1.77 million tonnes in May to 1.69 million tonnes in June.
- Sabah recorded the steepest decline at 9.76%, followed by Sarawak at 7.35%, then Peninsular Malaysia at 1.28%.
- Output of palm kernel and crude palm kernel oil also fell, by 5.66% and 8.48% respectively, reflecting a broader slowdown in upstream production activity.
Stock Levels: A Mixed Picture
- Total crude oil stocks fell by 5.42%, with sharp declines in Sarawak (9.33%) and Peninsular Malaysia (6.61%).
- By contrast, refined oil stocks rose by 12.19%, driven by a substantial increase in Sarawak (34.33%) and Peninsular Malaysia (11.7%).
- This divergence points to a shift towards greater refining activity, despite weaker crude output.
Sharp Drop in Exports
- Palm oil exports fell by 10.52% to 1.26 million tonnes, while palm kernel oil exports dropped by 27.6%.
- The biodiesel segment recorded the steepest decline, down 91.5%, which may reflect weaker global demand or a shift towards domestic consumption.
- Oleochemical exports also fell, by 12.95%, adding further pressure on external trade performance.
Imports and Prices
- Imports of refined palm oil rose slightly by 1.51%, while imports of palm kernel oil surged by nearly 48%, likely offsetting the domestic production shortfall.
- The average price of fresh fruit bunches (FFB) fell by 1.32% to 42.63 ringgit per tonne.
Summary
June 2025 was marked by a decline in crude oil production and exports, alongside a rise in refined oil stocks, pointing to a greater focus on refining activity. With global demand for biodiesel and oleochemical products weakening, the sector may face margin pressure unless exports recover or domestic consumption increases.
