Malaysia’s December palm oil inventories are expected to have risen to their highest level in almost seven years, as strong monthly production overpowered a modest improvement in exports, a Reuters survey showed on Monday.

Palm oil stocks are expected to rise to 2.97 million metric tons, up 4.7% from November, its highest since February 2019, according to a median estimate of 10 traders, planters, and analysts polled by Reuters.

Crude palm oil output is expected at 1.76 million metric tons, the highest December production since 2018, despite declining 9% from the previous month, which was its second consecutive monthly fall.

Exports of palm oil products are projected to rise 2.8% to 1.25 million metric tons, rebounding from last month’s decline, the survey showed.

December palm oil production did not record a significant decline for that period, while exports failed to improve even from November’s low base, said Anilkumar Bagani, research head of Mumbai-based vegetable oil broker Sunvin Group.

Malaysia surprised the market with robust production in the October quarter, lifting the country’s total output above 20 million tons for the first time on record, traders said.

Palm oil has traded at a discount to rival edible oils over the past two months, a factor that could attract buyers and support export demand in the coming months, they said.

“The focus will be back on the first quarter of 2026 when the Chinese New Year, Ramadan and biofuel demand will guide the price action,” Bagani said.

The Malaysian Palm Oil Board (MPOB) is scheduled to release its monthly data on January 12.
Source: Reuters