MPOC Forecasts Seasonal Drop In Palm Oil Exports For January, February 2025

KUALA LUMPUR, Jan 20 (Bernama) -- Malaysia’s palm oil exports are expected to experience a seasonal decline in January and February this year, primarily due to a drop in production, said the Malaysia Palm Oil Council (MPOC).

In a statement today, the MPOC noted that although the monsoon season, which had curtailed harvesting activities, began subsiding in Malaysia and Indonesia during the final week of December 2024, the impact of three public holidays this January is expected to result in fewer harvesting days and lower output.

“This contrasts with the rising palm oil consumption during January and February due to the Chinese New Year and Ramadan celebrations,” it said.

MPOC also said that the direction of palm oil prices in 2025 will largely depend on the export supply dynamics of Malaysia and Indonesia, along with policy shifts in the United States and Indonesia.

It said Malaysia’s palm oil production is anticipated to remain steady at 19.5 million tonnes in 2025, while Indonesia is projected to recover by approximately 2.0 million tonnes, reaching 48 million tonnes.

“However, the recovery in Indonesia’s production is anticipated to be fully absorbed by the increased demand for B40 biodiesel blending. Thus, export supplies from both Malaysia and Indonesia are unlikely to see significant growth,” it said.

MPOC added that before 2024, Malaysia’s palm oil inventories largely depended on imports, with approximately 1.0 million tonnes of palm oil imported from Indonesia annually.

“However, import volumes plummeted to 253,000 tonnes in 2024, a 72 per cent decline, which is reflected in the current low stock level.

“This trend is expected to persist, with imports in 2025 projected to remain low. As a result, Malaysia’s palm oil inventories are likely to stay below average at around 1.7 million tonnes in the first quarter of 2025, before the peak production season,” it noted.

MPOC said that palm oil prices are projected to trade between RM4,250 and RM4,550 in the first quarter of 2025.

It said demand for palm oil is expected to rise after March, driven by a tightening supply of sunflower oil resulting from significant frontloading exports from the Black Sea region.

“Key factors influencing palm oil prices in the coming months will be the availability of export supplies from Malaysia and Indonesia, as well as the evolving biofuel policy under the Donald Trump and Prabowo Subianto administrations,” it added.

-- BERNAMA