Feb 2025 Palm Oil Stock Falls by 4.3%!

Palm oil stock level fell for the fifth consecutive month, by -4.3% month-on-month (MoM) to 1.51 mil tonnes in Feb-25, as weaker exports were more than offset by lower imports and output, as well as higher domestic consumption.  

Palm oil production remained on downtrend, falling by -4.2% MoM to 1.19 mil tonnes in Feb-25, as seasonally low cropping pattern was exacerbated by excessive rain. Exports fell further, by -16.3% MoM to 1.0 mil tonnes in Feb-25, due to demand rationing, palm’s weak price competitiveness against other competing oils, and seasonality, in our opinion. This is according to a Hong Leong Investment Bank (“HLIB”) report. 

Cargo surveyor Intertek Services indicated that palm oil shipment from Malaysia fell -12.0% MoM to 141k tonnes during the first 5 days of Mar-25, dragged mainly by lower shipments to Africa, India and Middle East.

 

The downtrend in palm oil stock level will likely persist into Mar-25, mainly on the back of less favourable weather conditions, which will likely suppress palm production further. 

Demand rationing, on the other hand, will likely persist into Mar-25. This will cap restocking activities. YTD, CPO price averaged at RM4,709 per mt. 

 

Crude palm oil (CPO) price will remain at elevated level in the near term, and CPO price strength to dissipate post quarter one 2025. That’s according to HLB Research. 

HLIB is keeping their 2025-26 CPO price assumptions of RM4,000 per mt and RM3,800 per mt unchanged. Costs can be improved with automation and innovation. Large oil palm companies must take the lead! That will also reduce foreign labour force. 

Reference:

Feb 2025 palm oil stock falls 4.3% amid weaker exports, higher consumption, CS Ming, Focus Malaysia, 11 March 2025