Malaysia’s Palm Oil Stocks Rise to 3-Month High in May

According to the Malaysian Palm Oil Board (MPOB), Malaysia’s palm oil stocks rose 0.5% from the previous month to 1.75 million metric tons in May, the highest level since February.

The increase in end-May palm oil stocks, the world’s second-largest producer after Indonesia, could potentially weigh on benchmark palm oil futures, which were down about 0.6% by the midday trading break.

The data showed that crude palm oil production gained 13.48% from April to 1.70 million tons, the biggest increase in six months. Palm oil exports also rose to a six-month high of 1.38 million tons, up 11.66% from April.

A Reuters survey had forecast May inventories at 1.75 million tons, with output at 1.65 million tons and exports at 1.41 million tons. The MPOB’s reported figures were largely in line with the survey’s expectations.

The rise in palm oil stocks, despite strong exports, can be attributed to a rebound in production. This indicates that the supply and demand dynamics in the Malaysian palm oil market have shifted, potentially leading to downward pressure on prices.

The Malaysian palm oil industry is closely watched globally, as the country is the world’s second-largest producer and exporter of the commodity, which is widely used in food, cosmetics, and biofuel production.

Malaysia’s Palm Oil Stocks Rise to 3-Month High in May
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