Malaysia’s palm oil stocks reached a 10-month low at the end of March, driven by a significant increase in exports that offset a rebound in production, according to the industry regulator. The reduction in stocks in Malaysia, the world’s second-largest palm oil producer, is expected to provide support to benchmark futures, which recently rose to a one-year high.
The data from the Malaysian Palm Oil Board (MPOB) revealed that palm oil stocks at the end of March decreased by 10.68% from the previous month to 1.71 million metric tons, marking their lowest level since May. Additionally, crude palm oil (CPO) production surged by 10.57% from February to 1.39 million tons, while palm oil exports experienced a notable increase of 28.61% to 1.32 million tons.
These developments have had a positive impact on the palm oil industry, with the reduction in stocks reflecting a balance between production and demand dynamics. The surge in exports has played a pivotal role in driving down stock levels, contributing to the overall bullish sentiment in the market.
The decline in palm oil stocks in Malaysia, coupled with the robust export performance, is expected to have a supportive effect on benchmark futures, reflecting the industry’s resilience and adaptability in response to evolving market conditions.