In July 2024, Malaysian palm oil exports soared by 40% to 1.69 million tonnes, marking the highest monthly export volume since July 2020. This robust performance was accompanied by a significant 14% increase in palm oil production, which reached 1.84 million tonnes. The strong export growth was predominantly driven by the Africa and Middle East regions. Exports to Africa surged by 141% month-on-month to 422,000 tonnes, while shipments to the Middle East rose by 120% to 256,000 tonnes.
Over the first seven months of 2024, Malaysian palm oil exports exhibited notable growth across various regions. Exports to the Asia Pacific, South Asia, Europe, and Americas regions increased by 15%, 16%, 35%, and 117%, respectively. The substantial rise in exports to Europe is attributed to restocking ahead of the EU Deforestation Regulation (EUDR) set to take effect in December. Meanwhile, the increase in exports to the Americas is due to reduced palm oil production in Latin America, leading the American market to shift its imports towards Malaysia.
Palm oil prices are expected to remain stable in August, largely due to an anticipated recovery in Indonesian palm oil production from August to October. Malaysian palm oil stocks are also projected to rise in the coming months, influencing price dynamics. From January to May 2024, Indonesian palm oil production fell by 6% (1.38 million tonnes), and exports dropped by 11% (1.15 million tonnes) compared to the same period last year. With Indonesian production expected to rebound, palm oil exports from Indonesia are likely to increase, intensifying competition with Malaysian palm oil exports.
Globally, while soybean supply is anticipated to remain ample, production of sunflower seeds in the Black Sea region is projected to decline by 1 million tonnes. Additionally, rapeseed supplies from Europe and Australia are expected to decrease by 2 million tonnes. The tightening supply of sunflower and rapeseed oil is anticipated to support vegetable oil prices.
Palm oil prices are projected to find support at RM3,700 in August, driven by the tightening supply of sunflower and rapeseed oil. However, prices are expected to be capped at RM3,900 due to the abundant global soybean supply and the anticipated increase in Indonesian palm oil production, which will heighten competition in the market.
