Lang
Malaysia’s palm oil industry recorded stronger production and exports in June 2026, according to the latest monthly report from the Malaysian Palm Oil Board.
However, the increase in total palm oil stocks and the sharp rise in imports indicate that supply expanded faster than market absorption during the month. The June figures are provisional, while the May figures are revised.
Malaysia’s crude palm oil production increased by 8.08% month on month to 1.639 million tonnes in June, compared with 1.516 million tonnes in May. This represented an increase of 122,450 tonnes.
Peninsular Malaysia accounted for almost the entire national production increase. Output in the region jumped by 15.38% to 917,086 tonnes, an increase of 122,244 tonnes from the previous month.
Production in Sabah also increased by 5.07% to 362,689 tonnes. In contrast, Sarawak recorded a 4.60% decline, with production falling to 359,002 tonnes.
Palm kernel production rose by 8.16% to 381,480 tonnes, while crude palm kernel oil production edged down by 0.46% to 174,071 tonnes.
Malaysia’s total palm oil stocks increased by 4.78% to 2.544 million tonnes in June, up from 2.428 million tonnes in May.
Crude palm oil stocks rose by 3.75% to 1.333 million tonnes, while processed palm oil stocks increased by 5.94% to 1.211 million tonnes.
Peninsular Malaysia recorded the largest regional stock increase, rising by 9.36% to 1.345 million tonnes. Stocks in Sarawak increased by 5% to 509,045 tonnes, while Sabah recorded a 3.26% decline to 690,126 tonnes.
The overall stock increase of 116,123 tonnes, despite stronger exports, suggests that supply growth outpaced the volume absorbed by exports and domestic demand during the month.
Malaysia exported 1.204 million tonnes of palm oil in June, an increase of 6.19% from 1.134 million tonnes in May. Export volumes rose by 70,134 tonnes during the month, indicating an improvement in external demand.
However, exports grew at a slower rate than production, contributing to the increase in domestic stocks.
Palm kernel cake exports recorded particularly strong growth, rising by 23.61% to 219,887 tonnes. By contrast, palm kernel oil exports declined by 2.64% to 83,712 tonnes, while oleochemical exports fell by 12.37% to 224,055 tonnes.
The sharp fall in biodiesel shipments was one of the most significant negative developments in the June report.
Malaysia’s biodiesel exports dropped by 88.35%, falling from 41,361 tonnes in May to only 4,817 tonnes in June. This represented a monthly reduction of 36,544 tonnes.
The collapse in biodiesel shipments contrasted with the improvement recorded in palm oil and palm kernel cake exports.
Malaysia’s palm oil imports increased by 135.33% to 103,113 tonnes in June, compared with 43,816 tonnes in May.
All imported volumes consisted of processed palm oil, while no crude palm oil imports were recorded during either month.
The surge in imports, combined with higher domestic production, increased the volume of palm oil available in the Malaysian market and contributed to the monthly stock build. Total palm kernel oil imports, meanwhile, declined by 31.01% to 5,978 tonnes.
The fresh fruit bunch price based on a 1% oil extraction rate equivalent declined by 1.27%, falling to RM48.90 in June from RM49.53 in May.
The modest decline may reflect pressure from higher production, rising stocks and increased processed palm oil imports, which outweighed the positive impact of stronger export demand.
The June report presents a broadly positive operational picture for Malaysia’s palm oil industry, supported by higher crude palm oil production and stronger core palm oil exports.
However, the rise in total stocks above 2.54 million tonnes shows that supply expanded faster than demand during the month. The sharp increase in processed palm oil imports added further volume to the domestic market, while the collapse in biodiesel exports represented a notable weakness in downstream demand.
The market’s direction in the coming months will depend largely on whether exports can continue growing fast enough to absorb elevated production and reduce inventories. Key indicators to watch include the pace of stock accumulation, export demand from major importing countries, the recovery of biodiesel shipments and the ability of palm oil prices to withstand higher supply.
Source: Malaysian Palm Oil Board.
