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The Chief Executive Officer of the Malaysian Palm Oil Council (MPOC), Belvinder Kaur, said that a decline in India's palm oil imports between December 2024 and February 2025 had led to a sharp drop in the country's vegetable oil stocks.
She added:
"Despite the significant increase in soybean oil imports over the past three months, India has only offset part of its palm oil demand.
Given this, there is optimism that India will increase its palm oil imports in the coming weeks to rebuild stocks, which would support palm oil prices."
Belvinder also noted that fluctuations in crude palm oil (CPO) prices are heavily influenced by global supply and demand dynamics.
As of February 2025, Malaysia's palm oil stocks stood at 1.51 million tonnes, down from 1.92 million tonnes in February 2024 and 2.11 million tonnes in February 2023.
She explained:
"With seasonal production recovery starting in March, Malaysia's palm oil stocks are expected to gradually rise to meet global demand without putting pressure on the supply side."
The MPOC had recently forecast that crude palm oil prices would range between 4,400 and 4,600 ringgit per tonne in March 2025, affected by growing competition from soybean oil, which is available in large volumes and at competitive prices on the global market.
The council noted that higher palm oil prices and tight export supplies had weighed on consumption in key markets such as India and China, particularly during the first two months of this year.
In 2024, the United States imported 191,000 tonnes of Malaysian palm oil, equivalent to 1.1% of Malaysia's total palm oil exports.
Belvinder said the volume of exports to the US is small relative to overall exports, but the US market remains important given the specialised nature of demand there.
She added:
"Malaysian palm oil exported to the United States is used in specialised applications where alternatives are hard to find, making demand relatively inelastic.
About 65% of Malaysia's palm oil exports to the United States are certified and used in high-value products, while stearin accounts for around 20%, a key ingredient in the food and personal care industries."
Based on these factors, Belvinder believes the impact of potential US tariffs on Malaysia's palm oil sector would be limited.
She added:
"The specialised nature of demand in the US market makes it more resilient to changes in trade policy."
Belvinder also noted that Malaysia's average domestic palm oil consumption stands at around 300,000 tonnes a month, with demand rising during festive seasons such as Ramadan and Eid al-Fitr.
She said:
"Palm oil production follows a seasonal pattern, typically declining from October to February. Poor weather conditions can make harvesting difficult, while heavy rainfall can reduce fresh fruit bunch (FFB) yields."
Nevertheless, Belvinder reassured that Malaysia's palm oil production is expected to gradually recover starting in March, ensuring sufficient supply for the domestic market.
She concluded:
"We do not anticipate any shortage in palm oil supply within Malaysia."
Source: Al Mal Forum