Lang
Malaysia’s palm oil stocks are expected to decline in December for the third consecutive month because lower production following recent heavy rains affected harvesting, according to a Reuters survey released on Monday.
The median estimate of 11 traders, planters, and analysts surveyed suggests palm oil stocks could fall to 1.76 million metric tonnes, down 4.42% from November.
Lingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari, said lower ending stocks are in line with general expectations following recent heavy rains in the country.
The Malaysian Palm Oil Board had indicated in early December that production was expected to decline during the month due to heavy rains that affected harvesting in the world’s second-largest producer of the tropical oil.
The survey also showed that crude palm oil production is expected to fall by 8.53% to 1.48 million metric tonnes, the fourth consecutive monthly decline and the lowest level since April 2024.
Lingam added that focus is now shifting to demand expectations in the first quarter of 2025, especially with Brazil’s large soybean crop.
He said lower prices for competing vegetable oils will limit palm oil prices, while uncertainty surrounding Indonesia’s B40 biodiesel mandate is another bearish factor for the market.
The survey forecast that exports of palm oil products in December would fall by 7.55% to 1.38 million metric tonnes, the second consecutive monthly decline.
A New Delhi-based trader said cargo surveyor data indicated lower exports. The market is now eagerly awaiting December production figures, as November production came in below industry expectations.
The trader added that any unexpected decline in December production could support falling palm oil prices.
The Malaysian Palm Oil Board is scheduled to release its monthly data on January 10.