Malaysian Palm Oil Faces Headwinds as Stocks Swell and Exports Slump in November 2025

Malaysia's palm oil industry faced significant downward pressure in November 2025. While production posted only a moderate seasonal decline, a sharp contraction in export demand drove a substantial build-up in stocks, putting strong pressure on domestic prices.

The latest data from the Malaysian Palm Oil Board (MPOB) highlights a mismatch between supply and demand, pushing total palm oil stocks up by more than 13% month on month.

Executive summary: the numbers at a glance

1. Stocks: a jump in inventories

The standout feature of the MPOB's November report was the surge in stocks. Total palm oil inventories climbed to 2.84 million tonnes, up 13.04% from October.

• Crude palm oil (CPO) stocks: jumped sharply by 17.56%.
• Regional divergence: Peninsular Malaysia saw the largest build-up, with crude oil stocks surging 21.16%, adding more than 152,000 tonnes.
• Impact: This inventory surplus poses a psychological barrier for bullish speculators and is likely to cap price gains in the near term until stock levels fall back below the 2.5-million-tonne threshold.

2. Exports: demand takes a heavy hit

The main driver behind the stock build-up was a sharp export slowdown. Palm oil exports collapsed by 28.13%, falling from 1.69 million tonnes in October to just 1.21 million tonnes in November.

• Oleochemicals: Exports in this high-value segment also fell, down 20.13%.
• Biodiesel paradox: In a striking divergence from the broader market, biodiesel exports surged by a massive 104.79%, reaching 47,059 tonnes. Although the volume remains small compared with CPO, it points to growing overseas demand tied to renewable fuel mandates.

3. Production: the seasonal slowdown

Crude palm oil production followed the usual seasonal pattern seen at year-end, falling 5.30% to 1.94 million tonnes.

• Peninsular Malaysia: led the decline, dropping 6.69%.
• East Malaysia: Sabah and Sarawak posted smaller declines of 1.98% and 5.15% respectively.
• Analysis: Under normal circumstances, lower output would have supported prices. However, the drop in production was far outweighed by the much steeper fall in exports: supply fell by roughly 108,000 tonnes, while exports dropped by around 474,000 tonnes, cancelling out any positive effect from the lower output.

4. Price impact: growers under pressure

The supply glut weighed directly on farm-gate prices. The average price of fresh fruit bunches (FFB) fell to 44.75 ringgit per tonne, equivalent to a 1% oil extraction rate, a decline of 8.07% from the previous month.

Outlook for December 2025

The market enters December on shaky footing. The huge gap between the modest production decline and the collapse in exports remains the key concern. Unless export demand rebounds significantly, potentially driven by pre-festive-season buying or the appeal of lower price points, stock levels risk breaching the 3-million-tonne mark, which could pile further pressure on CPO prices heading into the new year.

Market watch: Traders should closely monitor export data for the first ten days of December to see whether the price correction has spurred renewed buying interest from key importers such as India and China.