Supply tightening boosts value for Malaysian palm oil
11/04/2026 (New Straits Times), Kuala Lumpur - The Malaysian palm oil industry has entered a solid growth phase in March, fuelled by a massive surge in exports that pushes inventories to their lowest level in seven months.
The country's palm oil stocks tumbled 16.1 per cent to 2.27 million tonnes in March from February, marking their lowest level since August, data from the Malaysian Palm Oil Board showed on Friday.
Industry observers said this tightening supply, down for a third consecutive month, demonstrates the global market's strong appetite for Malaysian palm oil.
With demand significantly outstripping production, benchmark futures are poised for a robust rally, further strengthened by rising global energy prices that enhance the value of Malaysia's premier commodity, they added.
Reuters said falling inventories in the world's second-largest producer of the tropical oil could support benchmark Malaysian futures, which have climbed in recent weeks after the Iran conflict drove energy prices higher.
Crude palm oil production increased 7.2 per cent to 1.38 million tonnes, snapping a four-month run of declines. Even so, that was the lowest level of output for the month of March in three years.
Palm oil exports rocketed 40.7 per cent higher to 1.55 million tonness, the most in five months.
A Reuters survey had forecast inventories at 2.18 million tonnes, with output seen at 1.34 million tonnes and exports at 1.56 million tonnes.
"Despite the hefty reduction in March, Malaysian palm oil inventories remain well above typical levels for this time of year," it quoted Anilkumar Bagani, research head at vegetable oil broker Sunvin Group.
"Export performance will need to be repeated in April to support the market, as production so far this month is still seen as elevated, while exports are sharply down in the first 10 days."
A recent rally in soyoil prices has widened palm oil's discount to its rival, potentially drawing Indian buyers back into the market after they stayed on the sidelines last month, said a New Delhi-based dealer with a global trade house.
India's palm oil imports fell nearly 19 per cent in March to a three-month low, dealers said.