Palm oil stockpiles in Malaysia climbed at the fastest pace in five months as a sharp drop in exports overshadowed weaker production in the world’s second-largest grower.
Inventories in May climbed 5.2% from a month earlier to 2.43 million tonnes, according to data released by the Malaysian Palm Oil Board (MPOB) on Wednesday. The gain was more than double the 2.2% rise forecast in a Bloomberg survey. The buildup reflects a sharp slowdown in overseas shipments as buyers flocked to discounted Indonesian cargoes following Jakarta’s overhaul of its key commodity exports.
Malaysian exports fell about 14% to a one-year low of 1.11 million tonnes, compared with estimates for a 6.2% drop. While there were initial expectations that the new Indonesian regime — announced late last month — would divert demand to Malaysia, that has yet to materialise. Instead, buyers in key markets including India and China have been scooping up more attractively priced Indonesian supplies.
Competition between the two neighbouring countries may intensify in the coming months as Indonesian exporters rush to move cargoes before the state-controlled framework is fully implemented. The top producer, which supplies more than half the world’s palm oil, began a transition phase this month and is still ironing out key operational details, with a review due in three months. Companies can continue conducting transactions for now, which has created an incentive for refiners and exporters to push out supplies before tighter controls are enforced.
Malaysia’s crude palm oil production, meanwhile, fell 7% to 1.52 million tonnes, according to MPOB, compared with estimates for a 4.9% decline. Imports slumped 42% to 43,816 tonnes, the data showed.
Investors are also watching Malaysian cargo surveyor data for the first 10 days of June, due to be released later on Wednesday, for clues on how buyers are reacting to Indonesia’s new rules.
Prices
● Palm for August delivery on Bursa Malaysia Derivatives rises as much as 0.5%, falls as much as 0.6% before the MPOB data was released
● Futures as of midday break are little changed at RM4,529/tonne, up 12% year to date
● Soybean oil for December in Chicago is little changed at 70.56c/lb
● Refined palm oil for September on Dalian Commodity Exchange is up 0.4% to 9,300 yuan (RM5,579.79)/tonne; soybean oil for September is down 0.1% to 8,308 yuan/tonne
● Soybean oil’s premium over palm is about US$446 (RM1,812.28)/tonne versus an average of about US$217 in the past year, according to data compiled by Bloomberg
● Palm’s premium over gasoil is about US$81/tonne versus an average of about US$224 in the past year, according to data compiled by Bloomberg
Source: TheEdge
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<p>Time: November 2025<br /> By: WTO and International Trade Group, Legal Department – VCCI</p>
