Malaysia’s palm oil inventories climbed to their highest level in four months in June, driven by a sharp recovery in production that outstripped demand growth.
The stockpile increase marks a shift in the supply-demand balance for the world’s second-largest producer, complicating the recent bullish sentiment in edible oil markets.
2% to 1.2 million tons and ending two consecutive months of decline.
The inventory build comes as exports rebounded, rising 6.2% to 1.2 million tons and ending two consecutive months of decline.
However, the surge in domestic output was sufficient to offset the stronger export demand, leading to the accumulation of stocks.
This dynamic suggests that while demand is stabilizing, the supply side remains robust, potentially capping upside for palm oil prices in the near term.
Malaysian palm oil futures had extended a two-day rally earlier in the week, supported by firmer prices in rival edible oils and crude oil markets.