Seasonal decline in palm oil exports expected in January-February

21-Jan-2025 05:02 PM

The Malaysian Palm Oil Council (MPOC) has projected a seasonal decline in palm oil exports from Malaysia during January and February 2025, primarily due to lower production.

This decline is influenced by several factors, including reduced harvesting time caused by public holidays in January, which hampers the plucking of oil palm and milling operations.

Additionally, the monsoon season, which had been affecting Malaysia and Indonesia, was only coming to an end in December 2024, further impacting production.

Torrential rains and severe floods in November and December 2024 had already disrupted output.

Despite the anticipated lower production, the demand for palm oil is expected to rise due to events like the Chinese New Year and Ramadan.

MPOC highlighted that palm oil production in Malaysia is expected to remain steady at 19.5 million tonnes for 2025.

However, Indonesia's production is forecast to increase by 2 million tonnes, reaching 48 million tonnes, although this additional output will be absorbed domestically, particularly for biodiesel production.

Indonesia has raised the percentage of palm oil used for biodiesel from 35% to 40%, limiting the amount available for export.

In Malaysia, the stock of palm oil, which had historically been bolstered by imports, has also decreased significantly, dropping from 1 million tonnes to around 250,000 tonnes in recent times.

The future dynamics of palm oil prices will depend on factors such as exportable stock, policy changes in the US and Indonesia, and overall market conditions in both producing countries.