Malaysian Palm Oil Market Overview: Production & Stocks Surge Amid Export Slowdown (September 2026)

The Malaysian palm oil sector experienced significant structural shifts in September 2026, characterized by robust output expansion, inventory accumulation, and a notable contraction in export volumes, according to the latest data released by the Malaysian Palm Oil Board (MPOB).

1. Robust Production Growth Driven by Regional Spikes

Crude Palm Oil (CPO) production in Malaysia rose sharply by 16.48% month-on-month, reaching 2,116,950 tonnes in September 2026, up from 1,817,499 tonnes in August (+299,451 tonnes).

• Sabah led the production gains with a dramatic 35.00% increase to 457,760 tonnes.
• Sarawak output grew by 15.46% (507,086 tonnes).
• Peninsular Malaysia contributed a 10.86% rise (1,152,104 tonnes).

2. Record Surge in Total Palm Oil Stocks

Driven by higher production and muted export activity, total palm oil stocks (Crude and Processed combined) expanded by 24.54% to stand at 3,510,896 tonnes at the end of September.

• CPO Stocks: Grew by 31.88% to reach 2,163,173 tonnes, with Sarawak logging the highest stock buildup (+40.17%).
• Processed Palm Oil Stocks: Increased by 14.33% to 1,347,723 tonnes.

3. Contraction in Exports & Biodiesel Slump

Palm oil exports contracted by 12.13% month-on-month, dropping from 1,275,099 tonnes in August to 1,120,395 tonnes in September.The most prominent contraction occurred in Biodiesel exports, which plummeted by 91.69% (falling from 35,240 tonnes to just 2,930 tonnes). Additionally, Palm Kernel Oil exports shrank by 34.09%. On a positive note, Oleochemical exports registered a modest gain of 2.62% to reach 239,723 tonnes.

4. FFB Prices Remain Resilient

Despite supply accumulation, Fresh Fruit Bunch (FFB) prices showed remarkable resilience. The average 1% OER equivalent FFB price edged up by 1.37%, moving from RM 49.76 in August to RM 50.44 in September.

Market Outlook

The September 2026 MPOB report highlights a well-supplied market facing near-term export headwinds. Stakeholders will closely monitor international demand recovery and price adjustments as the industry manages elevated domestic inventory levels entering the final quarter of the year.

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