El Nino Drives Palm Oil Price Support Amid Rising Stocks

Palm oil stocks in Malaysia rose to a five-month high in July due to stronger production outpacing exports. According to data from the Malaysian Palm Oil Board, inventories increased by 3.3% month-on-month to 2.63 million tonnes.

CIMB Securities Sdn Bhd attributed the higher exports, particularly to India ahead of the festive season, for limiting the increase in inventories. However, production was still sufficient to push stocks higher during the month.

The research firms expect CPO prices to remain supported in the coming months due to concerns over weather conditions and global vegetable oil supply providing a floor to prices.