Malaysia’s palm oil production is set to decline in November, but high stocks will continue to pressure prices
Malaysia’s palm oil stocks rose 3.16% to 3.62 million tonnes in October 2026 despite exports surging 55.75% to 1.71 million tonnes. Production increased to 2.15 million tonnes. Seasonal output declines expected in November may support prices, but high inventories could limit recovery.
Malaysia is entering a seasonal decline in palm oil production in November 2026 following an increase in output in October. Meanwhile, substantial inventories and uncertainty over export demand continue to limit price recovery. Despite the expected decline in production, market analysts do not anticipate a rapid reduction in stocks, which is likely to keep pressure on prices in the coming months.
According to the Malaysian Palm Oil Board (MPOB), palm oil production increased by 1.73% month-on-month in October to 2.15 mln tons. Meanwhile, exports surged by 55.75% to 1.71 mln tons, indicating a significant recovery in international demand. Domestic consumption declined by 6.68% to 360.6 thsd tons.
Despite stronger exports, Malaysia’s palm oil inventories continued to rise. By the end of October, stocks reached 3.62 mln tons, up 3.16% from the previous month. However, actual inventories were significantly below market expectations, as production came in slightly lower than forecast, while exports exceeded earlier estimates.
The MPOB report was generally viewed as a positive signal for the palm oil market. Strong export growth partially offset higher production and limited the pace of inventory accumulation. Nevertheless, persistently high stocks indicate that supply in the Malaysian market remains substantial despite active demand from importers.
Palm oil production is expected to decline seasonally in November, potentially providing some support to prices. However, maintaining strong export momentum after October’s sharp increase remains uncertain. If international demand weakens, lower production may not be sufficient to significantly reduce inventories. Under these conditions, market fundamentals are likely to continue limiting the potential for a recovery in palm oil prices.
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Source : Ukr Agro Consult
