Petaling Jaya, 16 Aug 2024 – In July 2024, Malaysian palm oil exports surged by 40% to 1.69 million tonnes, marking the highest monthly export volume since July 2020. Similarly, palm oil production in Malaysia also experienced a double digit increase in July 2024, rising by 14% to 1.84 million tonnes. This strong export performance was primarily driven by the Africa and Middle East regions. Exports of Malaysian palm oil to Africa surged by 141% month-on-month to 422,000 tonnes, while exports to the Middle East increased by 120% to 256,000 tonnes.

In the first seven months of 2024, Malaysian palm oil exports have demonstrated remarkable growth across various regions. Exports to Asia Pacific, South Asia, Europe, and Americas region have increased by 15%, 16%, 35%, and 117%, respectively. The substantial rise in exports to Europe is attributed to restocking activities ahead of the upcoming EU Deforestation Regulation (EUDR) in December. Meanwhile, the surge in exports to America is due to weak palm oil production in Latin America. As a result, the American market has shifted its imports toward Malaysia.

Palm oil prices are expected to remain neutral in August, primarily due to an anticipated recovery in Indonesia’s palm oil production from August to October. Additionally, palm oil stocks in Malaysia are projected to rise in coming months, further influencing price dynamics.

From January to May 2024, Indonesian palm oil production declined by 6% (1.38 million tonnes), while exports dropped by 11% (1.15 million tonnes) compared to the same period last year. As Indonesian production is expected to recover from August to October, palm oil exports from Indonesia are also likely to increase during this period, intensifying competition with Malaysian palm oil exports.

While global soybean supply is expected to remain ample for the upcoming season, production of sunflower seeds in the Black Sea region is projected to decrease by 1 million tonnes. Additionally, rapeseed supplies from Europe and Australia are anticipated to decrease by 2 million tonnes. The tightening supply of sunflower and rapeseed oil is expected to provide continued support for vegetable oil prices.

Palm oil prices are projected to find support at RM3,700 in August, mainly due to the tightening supply of sunflower and rapeseed oil in upcoming season. However, prices are expected to cap at RM3,900 due to the abundant global soybean supply. Furthermore, the anticipated recovery in Indonesian palm oil production will create competition with Malaysian palm oil exports.

For more information on MPOC and Malaysian palm oil, visit https://mpoc.org.my/