PALMOILMAGAZINE, KUALA LUMPUR — Malaysia’s crude palm oil (CPO) stocks are expected to continue rising in the coming months, supported by stronger production and more favorable harvest patterns. However, research firms project that national inventories will remain below the two-million-ton threshold, indicating a relatively tight market.
Latest data show that Malaysia’s CPO stock at the end of March increased 3.5% month-on-month to 1.56 million tons, though still down 8.8% compared to the same period last year. This marks the first monthly increase since September 2024.
According to the New Straits Times, CIMB Securities stated in its research note that the stock buildup was mainly driven by higher output. Palm oil production in March reached 1.39 million tons, up 17% month-on-month but edging down 0.4% year-on-year. This figure slightly exceeded the five-year average for the same month of 1.38 million tons.
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“This increase in production was primarily supported by better weather conditions,” CIMB noted. The firm also projected that April stocks would rise by about 7%, fueled by stronger yields and weaker domestic consumption.
From a pricing perspective, CIMB maintained a short-term bearish outlook. Trade tensions between the United States and China, coupled with a sharp drop in global crude oil prices, were cited as key risks that could pressure CPO prices.
“Tit-for-tat tariff policies from the US and China could slow global economic growth and dampen overall commodity demand,” CIMB explained. Low crude oil prices were also seen as a threat to the sustainability of biodiesel programs, which have been a key driver of CPO demand.
Even so, CIMB kept its full-year average CPO price forecast at RM4,200 per ton, while expecting prices to soften slightly in the second quarter of 2025 to around RM4,726 per ton amid rising supply.
The firm also issued an “Overweight” rating on the agriculture and forestry sectors, signaling a positive outlook for equities in these industries. (P2)
