Malaysia’s palm oil market entered the second half of 2026 with rising inventories as seasonal production accelerated, while stronger exports helped absorb part of the additional supply.
PALMOILMAGAZINE, KUALA LUMPUR, Malaysia — Malaysia’s palm oil inventories rose 3.32% to 2.63 million tonnes in July 2026 from 2.54 million tonnes in June, according to the latest data from the Malaysian Palm Oil Board (MPOB), as crude palm oil production increased faster than the market’s ability to absorb the additional supply.
The increase was mainly driven by higher crude palm oil (CPO) inventories. MPOB data showed CPO stocks reached 1.43 million tonnes in July, up 7.24%, or 96,495 tonnes, from 1.33 million tonnes a month earlier.
Meanwhile, processed palm oil inventories edged down 0.99% to 1.20 million tonnes from 1.21 million tonnes in June.
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CPO Production Jumps 9.41%
The rise in Malaysia’s palm oil stocks coincided with a significant increase in production during July.
CPO output reached 1.79 million tonnes, up 9.41%, or 154,183 tonnes, from 1.64 million tonnes in June.
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Palm kernel production also increased, rising 10.69% month-on-month to 422,266 tonnes from 381,486 tonnes.
Production of downstream palm kernel products followed the same trend. Crude palm kernel oil (CPKO) output climbed 14.55% to 199,392 tonnes from 174,071 tonnes in June.
Palm kernel cake production rose 10.11% to 215,304 tonnes, compared with 195,534 tonnes in the previous month.
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Palm Oil Exports Post Strong Growth
Despite the increase in domestic inventories, Malaysia’s palm oil exports recorded solid growth in July.
Palm oil exports reached 1.39 million tonnes, up 14.50% from 1.22 million tonnes in June, according to MPOB data.
Exports of palm kernel products, however, showed mixed performance. Palm kernel oil exports slipped 1.73% to 82,261 tonnes from 83,712 tonnes a month earlier.
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Palm kernel cake exports also declined, falling 8.72% to 203,454 tonnes from 222,887 tonnes in June.
In contrast, oleochemical exports rose 17.81% to 265,198 tonnes.
The strongest growth was recorded in biodiesel exports, which surged 496.77% from just 4,817 tonnes in June to 28,745 tonnes in July 2026.
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Imports Decline, Except Palm Kernel Oil
On the import side, Malaysia recorded no CPO imports during July 2026.
Imports of processed palm oil and other palm oil products fell sharply by 51.93% to 49,566 tonnes, compared with 103,113 tonnes in June.
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Palm kernel oil imports, however, moved in the opposite direction, jumping 93.12% to 11,545 tonnes from 5,978 tonnes in the previous month.
The latest MPOB figures highlight the impact of rising seasonal production on Malaysia’s palm oil market, with the increase in output pushing inventories higher despite stronger export demand. (P2)
