Malaysia’s Q1-2022 Crude Palm Oil Production Seen Up 4% Over the Same Period Last Year

Malaysia’s crude palm oil production in the first quarter of 2022 saw an uptick over the same period the previous year. From January to March 2022, total production was 3.8 million mt up 4% over the 3.6 million mt of total production in the same quarter in 2021. The stock level has also seen a significant improvement from 2021 when production suffered from the impacts of the global health pandemic. Inventories in Q1-2022 was 2.3 million mt, 0.28 million mt up on Q1-2021.

Against the backdrop of the export ban by major producer Indonesia, the market is optimistic about Malaysia’s production and inventories providing some support balance to the palm oil market. Sentiments to ease the market tightness are already on the horizon according to some industry insiders. Malaysia’s production in April according to data from the Malaysian Palm Board (MPOB) was 1.46 million mt up 4% MoM. The same report puts April inventories at 0.89 million mt up for the first time in five months and a massive 17% increase on the previous month.

Tridge Analyst expects palm oil exports from Malaysia to change direction after it fell from 1.28 million mt in March to 1 million mt in April. In the coming weeks and possibly months, buyers of palm oil and other derivative products would fall on Malaysia for provisions. This is owing to Indonesia having broadened its export ban to include crude and refined palm oil to control what it describes as rising food costs and a shortage of domestic cooking oil. To accentuate the point, the Malaysian government has said it is confident it is prepared to supply palm oil to the global market.

In the end, palm oil may stay elevated further heating vegetable oil prices that have all traded higher recently. Already, sunflower oil prices have risen to historic highs amid the ongoing conflict in the Black Sea. Soybean oil prices have also been on a bullish run on the back of weather issues in South America. The market would also hope Indonesia curtails its policy flip-flops as a continuation that would further rattle all oils in the vegetable oil mix.