Malaysia Palm Oil Prices Plummet on Weak Exports and High Stocks

Palm oil prices in Malaysia have hit a 12-week low due to weak exports and increasing production. The December contract on Bursa Malaysia dropped by 0.46% to 4,533 ringgit/t, with a weekly loss of 2.98%. Analysts estimate that Malaysian ending stocks could exceed 3 million tons.

Weaker overseas shipments have put pressure on prices as domestic supply increases. September saw a sharp rise in palm oil output, and exports fell by 17.1-28.8% from August, according to Intertek Testing Services and AmSpec Agri Malaysia. High stocks are expected to cap prices, but lower production next year due to El Niño could provide some support.

The broader vegetable oil market is also a factor, with disruptions to sunflower oil shipments from the Black Sea region and a seasonal decline in South American soybean oil exports possibly supporting vegetable oil prices. Analysts expect palm oil to trade between 4,500 and 5,000 ringgit/t through the end of the year.