InfoSAWIT, KUALA LUMPUR — Malaysia’s crude palm oil (CPO) inventories surged in November, reaching their highest level in more than six and a half years amid weak exports and strong production, according to new data from the Malaysian Palm Oil Board (MPOB) released Wednesday.

As the world’s second-largest palm oil producer, Malaysia’s rising stocks are expected to exert additional pressure on CPO prices on the Bursa Malaysia Derivatives Exchange, which have been hovering near a five-month low.

MPOB reported that November stocks climbed 13% from October to 2.84 million tons — the highest since March 2019. While CPO production fell 5.3% to 1.94 million tons, the figure remains the highest November output since 2017.

Exports, however, plunged sharply. Shipments dropped 28.1% to 1.21 million tons, breaking a two-month rebound streak.

A Reuters poll earlier projected stocks at 2.66 million tons, with production at 1.98 million tons and exports at 1.44 million tons. The actual figures reveal stronger-than-expected supply pressure.

According to Mumbai-based Sunvin Group Research Head Anilkumar Bagani, Malaysia’s strong production momentum could push total output to 20 million tons for the first time in 2025 — a development that may deepen downward pressure on CPO prices.

Historically, Malaysia’s December production falls by an average of 8.9% over the past 25 years. Still, traders expect steeper pressure this year due to price competition from Indonesia.

A Mumbai trader noted that Malaysia’s December exports will face challenges following Indonesia’s move to cut export levies. Jakarta slashed its CPO export tax to US$74 per ton in December, down from US$124 in November, making Indonesian CPO more competitive in global markets.

With swelling stocks, weaker exports, and strong price rivalry from Indonesia, Malaysia’s palm oil market is expected to remain under pressure in the coming weeks. (T2)