Lang
Malaysia's palm oil exports climbed 7.7% month-on-month in September, up 102,000 tonnes to reach 1.42 million tonnes.
According to the Malaysian Palm Oil Council (MPOC), most regions posted gains except for the EU-27 and the Asia-Pacific region.
"Palm oil stocks rose in September to 2.36 million tonnes, the highest level in 22 months, even though export growth outpaced production," the council said in a statement.
The build-up was largely attributed to "domestic consumption returning to its usual range of 300,000 to 350,000 tonnes per month" after hitting a record 499,000 tonnes in August. Imports also rose by 20,000 tonnes (33.9% month-on-month), adding further to the stock accumulation.
The strongest growth was seen in South Asia, where exports to India climbed to 312,000 tonnes, marking an 11-month high. Exports to Sub-Saharan Africa, the Middle East and North Africa, the Americas, and Central Asia also rose during the month.
Meanwhile, palm oil regained its price premium over soybean oil on the global market. By mid-October, palm oil was trading at US$42 (197 ringgit) per tonne above soybean oil in Europe, and US$26 (122 ringgit) higher in India.
"Palm oil's discount to soybean oil between April and September was short-lived," the council added.
MPOC also noted speculation over a possible B50 biodiesel mandate in Indonesia. As this would support palm oil prices, the programme is expected to require around 17 million tonnes of palm oil for blending, an increase of three million tonnes over the current B40 mandate and equivalent to roughly 35% of Indonesia's palm oil output. The country also consumes about 10 million tonnes for food use, leaving around 22 million tonnes or less available for export if B50 is implemented. "This would result in a marked decline in exportable supplies, given that Indonesia has historically exported between 24 million and 28 million tonnes of palm oil annually over the past five years," the council added.
Global demand for vegetable oils is expected to lean heavily on sunflower oil, as exportable soybean oil supplies from the United States and Brazil are forecast to fall sharply by 41%, from 2.7 million tonnes in 2024-2025 to 1.6 million tonnes in 2025-2026, driven by rising domestic biofuel demand. In Argentina, a temporary exemption from export taxes on soybean products announced in late September spurred strong forward sales to China, which is expected to curb crushing activity and limit soybean oil exports in the coming months. Although the Black Sea sunflower seed harvest began in September, sunflower oil prices have remained firm, leading the vegetable oil market. By mid-October, European sunflower oil was trading at US$1,360 (6,392 ringgit) per tonne, about US$75 (353 ringgit) above palm oil and US$100 (470 ringgit) above soybean oil, amid tight and uncertain supply conditions. Meanwhile, ongoing US-China trade tensions have led to a build-up of soybean stocks in the United States as harvesting got under way in September and October. China has halted US soybean imports since May this year, sourcing almost exclusively from South America instead. "Although domestic crushing activity and soybean oil consumption in the US are expected to rise under the 45Z biofuel policy in 2026, which prioritises domestically produced feedstocks, these factors are insufficient to offset the sharp drop in exports to China," the council said. Vegetable oil prices are expected to remain firm for the rest of 2025, supported by strong palm oil and soybean oil markets. Falling exportable soybean oil supplies from Argentina are likely to push prices higher in the coming months, while ongoing speculation over Indonesia's B50 mandate will continue to support palm oil. "Palm oil prices are expected to remain stable above 4,400 ringgit per tonne, but market sentiment remains cautious amid weak crude oil prices, rising vegetable oil stocks in key consuming markets such as China and India, escalating US-China trade tensions, and a build-up in global soybean stocks," MPOC said.
Source: The Malaysian Reserve