Surplus stock of palm oil increased rapidly in Malaysia due to weak exports
04-Oct-2024 05:50 PM
Kuala Lumpur. Although the monthly report of the government body - Malaysian Palm Oil Board (Ampob) will come out next week, which will give a detailed account of palm oil production, export import, domestic consumption and outstanding surplus stock for the month of September,
but before that, the estimates made by industry-business sector analysts show that at the end of September, compared to August, the outstanding surplus stock of palm oil in Malaysia increased by 3.2 percent to 19.40 lakh tonnes, which is the highest level since January 2024.
According to analysts, at the end of August, there was a surplus stock of about 18.80 lakh tonnes of palm oil left, while in September 2023 it had reached 23.10 lakh tonnes.
Palm oil production is estimated to fall by 1.1 percent from 18.90 lakh tonnes in August to 18.70 lakh tonnes in September, but it is 20 thousand tonnes more than the production of 18.30 lakh tonnes in September 2023.
On the other hand, palm oil exports are likely to fall from 15.30 lakh tonnes to 15 lakh tonnes, but it is much higher than the export of 12.10 lakh tonnes in September 2023.
It is noteworthy that after Indonesia, Malaysia is the second largest producer and exporter of palm oil in the world. There was an increase in the outstanding surplus stock of palm oil in August as well.
There was a tremendous increase in the export of palm oil products from Malaysia in July, but it decreased in August and also fell by 2 percent in September.
There is a possibility of a sharp decline in palm oil imports in India in September, while imports may remain weak in October as well if prices remain high in exporting countries.
India is the largest importer of palm oil. Due to reduced imports, the outstanding surplus stock in Malaysia-Indonesia may increase further,
which may lead to a decline in the benchmark futures price of Malaysian palm oil on the BMD exchange. The peak season of palm oil production is still going on there.