MPOC expects Malaysia to maintain palm oil exports at around 16 million metric tons next year as lower Indonesian production and rising domestic biodiesel demand reshape global supply flows.
PALMOILMAGAZINE, KUALA LUMPUR — Malaysia’s palm oil exports are expected to remain broadly stable at around 16 million metric tons in 2027, even as production in the world’s two largest palm oil-producing countries, Indonesia and Malaysia, is projected to decline.
The outlook could strengthen Malaysia’s role as a key supplier to global palm oil markets as lower Indonesian exports are expected to reduce the volume available to international buyers.
Also Read: KPBN CPO Price Falls IDR515 to IDR15,000/kg as Malaysia Palm Oil Futures Drop 2.07%
According to Bernama, the projection was cited by the Malaysian Palm Oil Council (MPOC) based on independent global market analysis and forecasts from Oil World.
MPOC estimates that Indonesia’s palm oil production will decline by around 1.9 million metric tons in 2027, while Malaysia’s output is projected to fall by approximately 700,000 metric tons.
Indonesia’s lower production is also expected to weigh on exports. Indonesian palm oil shipments to global markets could decline by nearly 3 million metric tons next year, driven mainly by higher domestic demand for biodiesel blending and weaker production prospects.
Also Read: Malaysia CPO Price Falls 2.07% to RM4,673, KPBN CPO Drops to IDR15,000/Kg
The reduction in Indonesian export availability could increase Malaysia’s importance in meeting global palm oil demand.
MPOC said Malaysia’s currently elevated palm oil inventories may prove temporary, as changes in the balance between production, exports and domestic consumption are expected to influence stock levels in the coming months.
Malaysia Palm Oil Production Edges Higher in August
Against the longer-term outlook, Malaysia’s palm oil production increased modestly in August 2026.
Production reached 1.81 million metric tons, up 1.4% from July, supported by higher fresh fruit bunch (FFB) collection and an improvement in the oil extraction rate from the previous month.
Also Read: Riau FFB Price Falls to IDR 3,885.17/Kg for Sept. 23–29, 2026
However, production remained below the level recorded in August 2025. The year-on-year decline marked the sixth consecutive annual contraction since March 2026.
Malaysia’s cumulative exports for January–August 2026 continued to show growth, reaching around 10.4 million metric tons, an increase of approximately 806,000 metric tons from the same period a year earlier.
Monthly exports, however, weakened in August. Shipments fell 7.5% from July to 1.29 million metric tons, mainly due to lower exports to South Asia and the Middle East.
Also Read: BRIN and Sumitomo Develop 100% EFB Boiler Technology to Turn Palm Oil Residues Into Biomass Energy
Global Supply Shifts Reshape Malaysia’s 2027 Outlook
The latest projections point to significant changes in global palm oil supply dynamics heading into 2027.
Lower production in both Indonesia and Malaysia could tighten global availability, while stronger Indonesian biodiesel consumption is expected to divert more palm oil toward the domestic market and reduce exportable supplies.
For Malaysia, the shift could increase the importance of its role as an international supplier. However, maintaining exports at around 16 million metric tons will depend on the development of domestic production, inventories, domestic consumption and demand from major importing countries.
The balance between these factors will determine how much palm oil Malaysia can make available to the global market next year. (P2)
