JAKARTA: Malaysian palm oil futures closed more than 3% lower on Tuesday after data from the Malaysian Palm Oil Board (MPOB) revealed declines in stockpiles, production, and exports for November.
The benchmark February palm oil contract on the Bursa Malaysia Derivatives Exchange fell 165 ringgit, or 3.22%, to 4,955 ringgit ($1,119.52) per metric ton at the close.
Key Highlights from MPOB Data
- Stockpiles: Declined for the second straight month, down 2.6% to 1.84 million tons.
- Production: Dropped 9.8% to 1.62 million tons, the lowest November output in four years.
- Exports: Fell 14.7% to 1.49 million tons.
“The MPOB data aligns with most analysts’ expectations, so there were no major surprises,” said Paramalingam Supramaniam, director at Pelindung Bestari, a Selangor-based brokerage.
Future Outlook and Challenges
Analysts are now focusing on December and early 2025 production patterns, particularly the impact of recent floods and heavy rainfall. Torrential rains in late November caused flooding in Malaysia, and the country’s meteorological department predicts further monsoon activity, which could disrupt output in key production regions like Sabah and Sarawak.
Global Context
- Dalian Exchange: Palm oil contracts fell 2.25%, while soyoil saw a modest increase of 0.03%.
- Chicago Board of Trade: Soyoil contracts declined by 1.61%.
- Export Performance: Malaysian palm oil exports for December 1-10 rose, with Intertek Testing Services reporting a 3.9% increase and AmSpec Agri Malaysia noting a 1.1% rise.
Palm oil prices remain closely linked to the performance of rival edible oils, as the commodity competes for a share of the global vegetable oils market. Going forward, weather conditions and production trends will play a critical role in determining price movements.
