KUALA LUMPUR: Malaysia’s palm oil stockpiles likely expanded to a fresh record last month as elevated production outweighed a surge in exports, according to a Bloomberg survey ahead of official data next week.
Inventories swelled by about 7% to 3.76 million tonnes in October, according to the median of 11 estimates in a Bloomberg survey of plantation executives, traders and analysts. That would surpass September’s record and put stockpiles around 50% higher than the same period last year.
The growing glut could heap further pressure on benchmark palm oil futures in Kuala Lumpur, which have retreated about 8% from an August peak.
While easing prices have lured buyers, including from top importer India, swelling stockpiles have strained storage capacity in parts of Malaysia.
Crude palm oil output likely increased about 4% to a record 2.2 million tonnes in October, according to the survey, climbing for a fifth month and building on a 17% surge in September. That’s outweighed robust exports, which jumped 43% to 1.6 million tonnes, the biggest monthly gain in eight years, the poll showed.
“The surge in exports wasn’t enough” to trim stockpiles, said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari Sdn Bhd.
He predicts inventories could remain elevated until at least the first quarter of financial year 2027 before dry weather triggered by El Nino curbs production.
The harvest this year has been helped by some replanted areas reaching maturity, where younger, higher-yielding palms have replaced less-productive trees, according to the Malaysian Palm Oil Association.
Full-year output could match or top the record 20.28 million tonnes produced in 2025, the group’s chief executive officer Roslin Azmy Hassan said in an interview last month.
Palm oil futures dropped for a second session yesterday, but remain 14% higher this year. The commodity has been bolstered by expectations that El Nino will curb output in the coming months, along with Indonesia’s expanded biodiesel mandate. — Bloomberg
