Perak mills overwhelmed as palm output defies worries about El Niño
09/07/2026 (Reuters), Kuala Lumpur - Malaysia is experiencing a surge in palm oil production, as mills in the state of Perak struggle to process incoming product amid an influx of fresh fruit bunches (FFBs).
The surge is underway despite earlier concerns that El Niño would curb output in the country.
June production is expected to climb 8.9% from a month earlier to 1.65 million tonnes, according to a Reuters survey. Inventories will likely rise to their highest level for any June on record.
Sin Chew Daily, a local newspaper, earlier reported that palm oil mills in Perak were unable to absorb the bumper harvest from the state, with crude palm oil storage tanks at full capacity.
David Lim Lian Keong, president of the Palm Oil Millers Association, said the issue in Perak stemmed from a localised, seasonal spike in FFB production that temporarily exceeded the logistical and processing capacity of mills in that specific catchment area. He said the state "doesn't have many refineries to begin with".
Some mills in Perak are facing temporary congestion, with trucks queuing and a few mills temporarily limiting FFB purchases from smallholders in certain areas, Lim said.
However, Lim said this was a local issue and was not occurring across the country.
"Other key regions such as Kedah, Selangor, Negeri Sembilan and Pahang have not yet entered their peak production cycles and their mills currently have sufficient excess capacity to process all incoming FFB," he said.
Malaysia's crude palm oil production last year stood at 20.28 million tonnes, with Perak contributing 2,030,201 tonnes, accounting for about 10% of the nation's total output.
"Once this local peak passes and FFB volumes normalise, the situation should resolve itself without requiring any broader intervention," he said, adding that he expects things to return to normal soon.