According to the Malaysian Palm Oil Board (MPOB), domestic palm oil stocks rose 4.4% month on month (m-o-m) to 1.834 million tonnes in October 2021, following higher-than-expected production in the country and a slight dip in exports. Exports slowed marginally due to the post-festival season drop in demand from India. Production was 1.726 million tonnes during the month, exceeding expectations of a survey of 13 traders, analysts and growers, who had expected production at 1.68 million tonnes and ending stocks at 1.803 million tonnes.
October 2021 production remains in line with October 2020 levels. However, this is roughly 100,000 tonnes below pre-COVID-19 levels (October 2019), as lockdown restrictions in Malaysia caused a production crunch as key foreign workers were unable to reach palm oil plantations.
As Indian festival season has passed and the wedding season will end in December, the corresponding easing in demand will allow Malaysian palm oil stocks to continue rebuild to some extent. However, the start of the year will bring fresh Chinese demand ahead of the Lunar New Year (February 2022), which means these stocks could be quickly exhausted at the beginning of 2022.