Malaysia’s Palm Oil Stocks Surge to 2.93 Million Tonnes in December 2025

KUALA LUMPUR, El Sky News — Malaysia’s palm oil reserves are projected to increase by 3.0 per cent month-on-month, hitting 2.93 million tonnes in December 2025, according to a research note by CIMB Securities Sdn Bhd.

The anticipated stock build-up is attributed to moderate export growth failing to absorb production volumes, despite an expected seasonal slowdown in output.

📉 Production and Export Forecasts

CIMB Securities projects that palm oil production will see an 11 per cent month-on-month decline, settling at 1.72 million tonnes for the month. However, this contraction is insufficient to offset the projected modest export increase of only 2.0 per cent month-on-month. The resulting imbalance is the key driver behind the higher inventory forecast.

💰 Crude Palm Oil Prices Remain Subdued

The increasing inventory levels continue to cast a shadow over Crude Palm Oil (CPO) prices. CPO has recently traded at a weakened price of RM4,029 per tonne, with the three-month futures contract slightly higher at RM4,045 per tonne.

The weakness in CPO prices is linked to a confluence of global factors:

• Limited follow-through on Indonesia’s B50 biodiesel mandate.
• Concerns over Malaysia’s high stock levels.
• Uncertainty regarding the review of the United States’ biofuel policy.
• A “wait-and-see” approach adopted by buyers due to high inventory levels in producing nations.
• Delayed implementation of the European Union Deforestation Regulation (EUDR), which is affecting market sentiment.

Furthermore, palm oil faces intense competition from other edible oils amidst weaker demand from China.

🔮 Outlook and Price Forecast

CIMB Securities noted that the recent price dip has resulted in a small discount on palm oil compared to alternatives like soybean, rapeseed, and sunflower oil. This discount is expected to provide some support for exports.

Looking ahead, the brokerage firm believes that prices will remain supported above the RM4,000 per tonne level as the country enters the first quarter of 2026, when production typically moderates due to seasonal factors.

CIMB Securities maintains its average CPO price forecast of RM4,200 per tonne for 2026 and retains an “overweight” recommendation on the plantation sector.