Malaysia's palm oil inventories expected to hit 8-month high

Malaysia is expected to remain the world's second-largest producer of vegetable oils in September 2024, with a forecasted output of 1.86 million tonnes of crude palm oil (CPO), despite a slight decrease from the previous month due to dry weather. The country is on track to surpass 19 million tonnes of output for the year, thanks to government policies addressing labour shortages. However, palm oil exports have seen a consecutive monthly decline, with a predicted 1.65% drop in September 2024, largely due to competitive pricing from Indonesia and reduced demand from India. India, the largest buyer of vegetable oils, has increased the basic import duty on crude and refined edible oils by 20% to support local farmers. The Malaysian palm oil industry faces challenges such as aging oil palm trees and stagnant yields, but is focusing on replanting and global sustainability standards, aiming to align with the European Union Deforestation Regulation (EUDR). Palma oil futures have seen a consistent rise for the fourth session in a row.