PETALING JAYA: Malaysia’s palm oil stocks recovered marginally to 2.31 million tonnes in April, supported by a seasonal rise in production, said Malaysian Palm Oil Council (MPOC).
MPOC said palm oil production typically trends higher between March and October, as drier weather improves harvesting productivity and fresh fruit bunches yield higher oil extraction rates.
Cumulative exports from January to April 2026 rose by 25.5% (+1.1 million tonnes) to 5.38 million tonnes, the highest level since 2019. However, exports fell 14.3% month-on-month in April to 1.30 million tonnes. Despite the monthly decline, exports remained firm, accounting for 80% of Malaysia’s palm oil production during the month.
Soybean oil prices in the European market rose to the highest level since November 2022 in mid-May, making it the most expensive major vegetable oil, supported by demand from the US biofuel sector. During this period, soybean oil was trading at a premium of US$145/tonne over rapeseed oil, US$110/tonne over palm oil and US$45/tonne over sunflower oil in the global market.
The latest US biofuel developments have improved palm oil’s price competitiveness across major markets. Palm oil remains the most competitively priced vegetable oil in India, while palm olein prices in Malaysia were also trading at a marginal discount to Argentine soybean oil, a pricing dynamic that should continue to support palm oil demand.
In Q1 2026, MPOC said, combined palm oil exports from Malaysia, Indonesia and Thailand rose by 1.9 million tonnes. However, this trend is expected to reverse from April to September, with Oil World projecting combined exports from the three countries to decline by 2 million tonnes in Q2 and Q3, mainly due to lower Indonesian exports.
“Malaysia’s exports are projected to rise by 400,000 tonnes during the period, while Indonesia’s exports are forecast to decline by 1.7 million tonnes as more palm oil is redirected towards domestic energy use. As a result, a sharp build-up in palm oil stocks is unlikely during the upcoming peak production season in Southeast Asia,”it added.
The US Department of Agriculture has released its first estimates for oilseed production in the 2026/27 season, with all three major oilseeds projected to reach record highs. Global soybean production is forecast to rise by 14 million tonnes, sunflowerseed by 7 million tonnes and rapeseed by 1.4 million tonnes. Collectively, production of these three oilseeds is expected to increase by 4% or 22.4 million tonnes to a record 600 million tonnes.
Looking ahead, MPOC said crude palm oil prices are expected to hold around RM4,400 per tonne in June, as global biofuel policies continue to be the main supportive factor. Vegetable oil prices still have the potential to turn bullish, as the recent price correction was likely driven by funds and speculators taking profits.
Supply risks also remain due to unresolved geopolitical tensions and rising El Nino risk, which could add uncertainty to global vegetable oil supply in the upcoming season. El Nino typically brings drier-than-normal weather conditions to Southeast Asia, reducing rainfall and soil moisture and potentially affecting regional agricultural supply. The Malaysian Meteorological Department expects El Nino conditions to develop between June and July, potentially persisting into early 2027.
