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Malaysian palm oil stocks are expected to end the year at around 1.7 million tonnes because of a seasonal slowdown in production combined with higher exports to meet festive-season demand, according to The Star.
Malaysian Palm Oil Board (MPOB) Director-General Ahmad Parveez Ghulam Kadir said: “Production is slowly declining, and we expect exports to increase in the coming months due to festive-season demand.”
According to the September 30 report, palm oil production in Malaysia, the world’s second-largest producer and exporter of the oil, usually declines toward the end of the year after a strong September quarter.
In August, Malaysia’s palm oil stocks rose by 4.18% month on month to 2.2 million tonnes, the highest level since December 2023, according to MPOB data.
Meanwhile, The Star reported that Indonesia, the global palm oil leader, saw domestic consumption of crude palm oil rise sharply in 2024, leading to lower exports.
Almost half of the country’s 23.8 million tonnes of crude palm oil output was used by the domestic market in 2024, while total production fell to 52.7 million tonnes from 54.8 million tonnes the previous year, according to figures from the Indonesian Palm Oil Association (GAPKI) cited in a September 26 report.
GAPKI chairman Eddy Martono was quoted as saying that the biodiesel mandate is increasing domestic use, with food consumption followed by energy or biodiesel demand.
Speaking during a webinar hosted by the Institute for Development of Economics and Finance (Indef) on September 22, Martono added that Indonesia is the world’s largest consumer of crude palm oil, accounting for 27% of global consumption and 57% of global production.
He said global vegetable oil supplies could be disrupted if Indonesian exports are affected by the country’s domestic biodiesel program, pushing prices higher, and urged a balance between domestic supply and exports.
The Star wrote that Indonesian palm oil exports declined last year after prices rose above other vegetable oils and global buyers shifted to cheaper alternatives.
Although China and India remained the largest importers of Indonesian palm oil, shipments to India declined from mid-year.
Indonesia remains India’s largest palm oil supplier, shipping around 4.4 million tonnes of the commodity in 2024, according to Oil World.
Source: OFI Magazine