Malaysia’s Palm Oil Inventory Sees Significant Reduction in December 2023
10/01/2024 (BNN Breaking) - The palm oil sector of Malaysia, the world’s second-largest producer, experienced a significant dip in December 2023. According to the Malaysian Palm Oil Board (MPOB), the country’s palm oil stock decreased by 4.64% to 2.29 million tons from 2.4 million tons in November. This reduction marks a four-month low for the industry, reflecting a slump in production coupled with a slowdown in exports.
Inventory and Production Experience Decline
The inventory of crude palm oil (CPO) saw a more significant reduction of 9.43%, dropping to 1.2 million tons from 1.32 million tons the previous month. The production of CPO declined by 13.31% to 1.55 million tons, marking the lowest level in six months. This fall in production, coupled with the decrease in inventories, is poised to support benchmark futures, which lost 10% in 2023.
Mixed Picture in Export and Import Numbers
On the export front, palm oil exports saw a decrease of 5.12% or 72,021 tons to 1.33 million tons, and oleochemical exports also reduced by 5.38% to 245,048 tons. Biodiesel exports marginally decreased by 0.76% to 17,834 tons. There was a significant drop in palm kernel meal exports, which plummeted by 33.77% to 178,436 tons, and palm kernel oil exports fell by 11.53% to 88,261 tons. These numbers were lower than the forecasts, indicating a notable decline in Malaysia’s palm oil inventory in December 2023.
Conversely, the stock of processed palm oil slightly increased by 1.23% to 1.09 million tons. Imports of CPO were at 11,103 tons in December, and total palm oil imports decreased by 7.87% to 36,573 tons compared to the previous month, further reflecting the complicated dynamics of the industry.
Looking to the Future
As the palm oil industry navigates these challenging circumstances, analysts and traders are closely monitoring January’s export performance and production levels. The anticipation is for a further decline, a testament to the ever-changing landscape of the global palm oil market and the intricate play of supply and demand forces.