USDA forecasts Malaysian 2026/27 palm oil production at 19.7M tonnes
12/10/2026 (Oils & Fats International) - Malaysian palm oil production is expected to reach 19.7M tonnes in 2026/27 – down from the previous year’s revised estimate of 20.2M tonnes – with yields expected to decline due to potential El Niño-related weather conditions, according to a US Department of Agriculture (USDA) report.
At 5.16M ha, the estimated oil palm planted area was largely unchanged from 2025/26, while yields were projected to decline from 3.92 tonnes/ha to 3.82 tonnes/ha, the USDA’s 1 October ‘Malaysia: Oilseeds and Products Update’ said.
Potential El Niño-related weather conditions also posed downside risks to yields in 2027, according to the Foreign Agricultural Service (FAS) report.
According to the Malaysian Meteorological Department (MET Malaysia)’s September 2026 agroclimatic outlook, El Niño was rapidly strengthening and was expected to intensify through to late 2026.
“While the El Niño peak occurring during monsoon season is expected to lead to higher production initially due to less flooding, continued lack of rain will pose a downside risk to late MY2026/27 yields,” the USDA said.
The USDA maintained its 2026/27 forecast for total palm oil domestic consumption at 4.59M tonnes, with industrial consumption projected at 3.53M tonnes, supported by the full-year implementation of the country’s B15 biodiesel mandate.
Food use and feed and waste consumption remained unchanged at 950,000 tonnes and 110,000 tonnes, respectively.
The estimate for 2026/27 palm oil imports was increased to 600,000 tonnes.
“Imports are expected to remain elevated following the stronger import pace in 2025/26, as Malaysia continues to supplement domestic supplies for its growing refining and downstream processing industry and production is expected to decrease,” the USDA said.
The USDA maintained its palm oil export projection at 15.9M tonnes.
“Malaysia is expected to remain a major supplier to the global vegetable oil market, supported by its established refining industry and diversified export markets,” the USDA said.
“Exports are projected slightly below the revised 2025/26 estimate as higher domestic industrial consumption under the full-year implementation of the B15 biodiesel mandate increases competition for available palm oil supplies.”
The estimate for 2026/27 ending stocks was reduced from the previous projection of 2.56M tonnes to 2.49M tonnes due to lower beginning stocks carried over from the previous year.