InfoSAWIT, KUALA LUMPUR – Crude palm oil (CPO) futures on Bursa Malaysia Derivatives fell sharply on Thursday, with the benchmark contract closing more than 2% lower amid concerns over rising inventories, stronger production and weakness in competing vegetable oils.

The January 2027 CPO contract declined RM121, or 2.69%, to RM4,375 per tonne. The closing price marked its lowest level since March 6, 2026.

Market sentiment remained under pressure as traders anticipated a larger increase in Malaysian palm oil stocks than previously expected. Production was also forecast to exceed recent estimates, adding to concerns over the supply outlook.

Anilkumar Bagani, Head of Research at Sunvin Group, said the market remained bearish as participants anticipated a further build-up in inventories.

He added that developments in Indonesian exports could also weigh on the market. Indonesia may accelerate palm oil shipments over the next two months to take advantage of lower export tariff categories and avoid potential Danantara transaction fees related to export registration, which were reported to be scheduled for implementation in January.

In Malaysia, palm oil inventories were also expected to rise further. A Reuters survey estimated that stocks in October 2026 increased 6.8% from September's record 3.51 million tonnes to approximately 3.75 million tonnes.

Market participants are now awaiting the Malaysian Palm Oil Board's (MPOB) October supply and demand report, scheduled for release on November 10, 2026.

The data is expected to provide a clearer picture of Malaysia's palm oil market balance, particularly production, exports and inventory levels. (T2)

Source: Reuters