MPOC: Palm Oil Output Hits Highest May Level Since 2015 Amid Favourable Weather
KUALA LUMPUR, June 17 (Bernama) -- Malaysia’s palm oil production rose 5.05 per cent month-on-month in May to 1.77 million tonnes, marking the highest output recorded for the month since 2015, according to the Malaysian Palm Oil Council (MPOC).
The council attributed the increase mainly to favourable weather conditions that supported harvesting activities.
Exports also exceeded expectations, surging 25.62 per cent (+283,000 tonnes) to 1.38 million tonnes -- outpacing production growth by 198,000 tonnes.
“The rebound was primarily contributed by robust demand from China and India, which collectively accounted for 28 per cent of Malaysia’s total palm oil exports in May.
“This export momentum is expected to extend into the third quarter, supported by seasonal restocking demand and price competitiveness of palm oil,” it said in a statement.
On the supply side, MPOC said production is likely to ease in the near term following two conservative months of strong output.
Additionally, harvesting activities in June are also expected to decline due to fewer working days, as three national holidays and multiple state-level public holidays limit estate operations.
Meanwhile, the vegetable oil market remained broadly steady in June, fluctuating between RM3,800 to RM4,000 per tonne, underpinned by a recovery in crude oil prices, from a low of US$55 per barrel in May to a high of US$77 per barrel in June, as well as easing US-China trade tensions.
It said India’s recent cut in import duties on crude edible oils is expected to spur palm oil demand in the near term.
“The widened duty gap between crude and refined oils of 19.25 per cent improves the price competitiveness of crude palm oil (CPO) and is expected to lift Malaysian export volumes,” it said.
In 2024, 82 per cent of Malaysia’s palm oil exports to India were in crude form and the reference price for palm oil in the second half of June was US$83 below soybean oil, offering Indian buyers a clear cost advantage.
Despite elevated palm oil inventories, prices have remained resilient within a stable range, signalling a potential upward reversal. Downside risks appear limited in July, with Malaysian palm oil stocks expected to hover around two million tonnes amid strong exports and slowing output after robust production in April and May.
While the outlook remains broadly supportive, further price gains may be capped by the rising availability of soft oils. Global sunflower seed and rapeseed output is projected to increase by 8.1 million tonnes in the upcoming September-November harvest season.
In addition, strong soybean production in 2025 is expected to result in large carry-over stocks into 2026.
“Given these factors, palm oil prices are expected to trade in the RM3,900 to RM4,200 range in June and July, supported by firm exports, improved price competitiveness against soybean oil, and elevated crude oil prices,” it added.
-- BERNAMA