11-02-2025
Malaysia palm oil production plummets to lowest in nine years due to heavy rains
By Eko Listiyorini
(Bloomberg) — Palm oil output in Malaysia fell the most since 2016 as heavy rains and floods disrupted harvesting in the world's second-biggest grower.
At least five people were killed and thousands forced to move to safer places last month after days of heavy downpour triggered floods and landslides in several areas of the Southeast Asian nation. The states of Sarawak and Sabah, top oil palm growing areas, were among the worst affected, according to a statement from the country's weather agency.
Shrinking supplies in Malaysia could further support the commodity that gained more than 5 per cent in Kuala Lumpur last week. Prices jumped further on Monday, taking gains to 3.3 per cent so far in 2025, after being down 3.6 per cent for the year at the end of January.
Palm again commanded a premium over rival soybean oil – an unusual scenario as the commodity is generally the cheapest edible oil because of its round-the-year production, against the seasonal nature of other oilseeds. Oil palm also needs relatively less land to grow.
Palm has been trading higher than soy oil since September, except for about a month since 10 Jan.
Output in the country fell almost 17 per cent from a month earlier to 1.24 million tons in January, according to data released by the Malaysian Palm Oil Board on Monday. That's the lowest since April 2023 and below the median estimate in a Bloomberg survey last week.
Stockpiles dropped 7.6 per cent to 1.58 million tons, missing all analyst estimates in the survey. Exports decreased almost 13 per cent to 1.17 million tons, slightly better than the survey prediction.
The MPOB data is very supportive for prices, reinforcing concerns that supplies could be tight in the first quarter, said Sathia Varqa, an analyst at Fastmarkets Palm Oil Analytics in Singapore.
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