Malaysia, the world’s second-largest palm oil producer, reported a rise in palm oil stocks at the end of April, the first increase in six months. This surge in inventories is attributed to a jump in production, despite a drop in exports.
According to data from the Malaysian Palm Oil Board (MPOB), the industry regulator, Malaysia’s palm oil stocks increased by 1.85% from the previous month to 1.74 million metric tons.
Crude palm oil production in Malaysia gained 7.86% from March, reaching 1.50 million tons. However, palm oil exports fell by 6.97% to 1.23 million tons during the same period.
A Reuters survey had forecasted April inventories to decline by 2% to 1.68 million tons, with output at 1.46 million tons and exports at 1.22 million tons.
The rise in Malaysia’s palm oil stocks, despite the drop in exports, is likely to put pressure on benchmark palm oil futures FCPOc3, which are already trading near their lowest level in three months.
The increase in palm oil production and stocks in Malaysia, the world’s second-largest producer after Indonesia, is an important development in the global palm oil market. It could potentially impact prices and trade dynamics in the coming months.