Malaysia’s palm oil production surged to its highest monthly output in a decade, rising 203,000 tonnes (+11.0%) in October to 2.046 million tonnes, driven by favourable weather and improved fertilization practices. Sabah led the increase with a 19.5% rise to 72,000 tonnes, followed by Sarawak at 61,000 tonnes (+14.6%) and Peninsular Malaysia at 68,000 tonnes (+6.5%). The late arrival of the monsoon, optimal rainfall, and enhanced crop management contributed to the strong performance.
Exports also exceeded expectations, climbing 265,000 tonnes (+18.6%) to 1.69 million tonnes. Sub-Saharan Africa emerged as a key driver, with shipments to the region reaching a record 577,000 tonnes, accounting for 34% of total exports. Exports to China also rose to a five-month high of 110,000 tonnes.
Despite robust exports, Malaysia’s palm oil stocks increased to 2.46 million tonnes, the highest level since April 2019, reflecting weaker domestic consumption rather than production or export dynamics. Additionally, Malaysia imported 708,000 tonnes of palm oil from Indonesia between January and October 2025, a 266% jump from 193,000 tonnes in the same period last year.
Global palm oil prices eased 4% in November amid accumulating stocks, widening its discount relative to other vegetable oils. As of mid-November, palm oil traded at USD120 below sunflower oil, USD48 below soybean oil, and USD34 below rapeseed oil. This temporary price gap is expected to boost import demand, particularly ahead of the upcoming Ramadan, which coincides with Chinese New Year in February 2026 — a period traditionally marked by low production and high festive consumption.
In India, the price decline may prompt importers to replenish dwindling vegetable oil inventories. Indian palm oil stocks fell to 1.7 million tonnes in October 2025, down from 2.4 million tonnes a year earlier, while pipeline stocks remain low.
Indonesia’s policy uncertainty continues to influence global prices, with potential changes in export duties and the timing of a higher biodiesel mandate (B45 or B50) affecting exportable supplies in 2026.
Looking ahead, palm oil prices are expected to find strong support at RM4,100–RM4,200 per tonne in December, with potential to rise toward RM4,500, supported by stable import demand ahead of the festive season. The unusually strong production from July to October 2025 may also lead to a sharper seasonal decline in output as oil palm trees enter their resting phase, while the onset of the mid-November monsoon could disrupt harvesting activities.
