Malaysia's Palm Oil Stocks Soar, Putting Pressure on Prices

Palm oil prices are under pressure due to rising inventories in Malaysia and sluggish buying by India, the world's biggest importer. Malaysian officials expect stocks to rise above August's eight-month high of 2.82 million metric tonnes.

The current stock levels could spur selling, as they have only exceeded three million metric tonnes five times before. The last time this happened in December 2025, prices fell to around 4,000 ringgit (US$980) a tonne, lower than the current price of 4,780 ringgit.

Tajgir Rahman, general manager at International Foodstuffs (IFFCO), expects stocks to rise above three million metric tonnes by the end of this month. The impact of El Nino has yet to be felt, but palm yields typically respond with a lag, and its effects might not be clear until mid-2027.

Roslin Azmy Hassan, CEO of the Malaysian Palm Oil Association, said that stock levels would start easing from around October as production declines. However, the near-term downside risks are limited, according to Rahman, who predicts prices will rise when production declines and exports increase.