Malaysia Palm Oil Inventories Hit Record September High

Malaysia palm oil inventories likely reached a record high in September, potentially jumping 22 percent to 3.45 million tons. This surge followed a record September output of 2.11 million tons and a 12 percent decline in exports, which fell to 1.13 million tons.

The increase in stockpiles put downward pressure on benchmark futures in Kuala Lumpur, which dropped from a September peak of 5,049 ringgit to approximately 4,535 ringgit. Analysts attribute the growth to improved labor availability and favorable weather, though they warn that an intensifying El Niño could disrupt future production.

Demand remains dampened by high premiums compared to Indonesian supplies and existing stockpiles in importing markets. While India increased purchases ahead of Diwali following import duty cuts, overall demand has not offset the supply surge. The Malaysian Palm Oil Board is scheduled to release official supply and demand data on October 12.