Malaysian palm oil stocks set to top levels, signaling possible price rebound
Malaysian palm oil inventories are projected to reach their highest since 2018 in October, hinting at a turning point for crude palm oil prices.
Public Investment Bank Bhd projects that Malaysian palm oil stocks will peak in October after a six-month rise, with September levels topping three million tonnes—the highest since 2018. The buildup reflects reduced demand in China, Europe and the Middle East during the high-production season and a shift toward cheaper Indonesian crude palm oil, whose exports rose 35 % month-on-month in August while Malaysia’s fell. PublicInvest anticipates the inventory cycle to turn lower from November as production growth moderates, and expects a more pronounced drawdown by mid-2027 as El Niño impacts fresh fruit bunch yields.
The bank argues that a sustained inventory decline would strengthen fundamentals for a CPO price recovery, aligning with its RM4,500 per tonne full-year price assumption. It keeps an overweight stance on plantation stocks, highlighting the possible boost from El Niño-related supply constraints, higher crude oil prices, and Indonesia’s B50 biodiesel mandate, and names Sarawak Plantation Bhd and Ta Ann Holdings Bhd as preferred picks.
