Palm oil production and stocks in Malaysia are increasing, while exports are decreasing, which increases pressure on vegetable oil quotes

According to the Malaysian Palm Oil Board (MPOB), in August, Malaysia's crude palm oil production increased by 2.35% compared to July (up 7.09% in July compared to June) to a new high of 1.855 million tonnes, but exports decreased by 0.3% (+3.82% in July) to 1.324 million tonnes, leading to an increase in inventories for 6 consecutive months.

Malaysian palm oil inventories rose 4.2% in August (+4% in July and +4% in June) to a 2-year high of 2.2 million tonnes, pushing down quotes that had been almost unchanged for three weeks.

Yesterday, October palm oil futures on the Bursa Malaysia exchange fell 1.4% to 4,413 ringgit/t or $1,050/t, up 0.7% from last month.

An increase in palm oil inventories amid increased production and seasonal increases in sunflower, rapeseed, and soybean oil supplies could significantly depress the market in September and October, especially given the accumulation of soybean stocks in China.

Tomorrow, the USDA will update world balances, in which it may increase palm oil crop forecasts, which will increase pressure on palm oil quotes, and after it on other vegetable oils.