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Malaysian Palm Oil Production Rises, Output Dips

24 August 2012
USDA Foreign Agricultural Service

MALAYSIA - The Malaysian Palm Oil Board (MPOB) reported that total crude palm oil (CPO) production rose five per cent to 1.47 million tons in June 2012. Peninsular Malaysia’s production increased by 9.8 per cent during the month of June, while East Malaysia’s output was up 1.8 per cent.

However, compared to June 2011, output during June 2012 was 16 per cent lower. Biological stress beginning in early 2012 has lead to lower yields. CPO output for July-Sept is estimated to be about 5.4 million tons, compared to 5.3 million in the July-Sept quarter previous year.

In addition to the cyclical biological stress effecting yields, the long Ramadan holiday in mid to late August will limit labor availability, hinder collection, and contribute to the year-to-year decline in production during the quarter.

During the holiday period, expected to last for three weeks of August, premature harvesting will lead to lower oil extraction rates and uncollected fresh fruit bunches will further exacerbate lower CPO production. Dry weather is forecast for the month of September onwards (El Nino effect).


The monthly average delivered CPO price increased from $939/ton in June to $970/ton in July. For comparison, the average CPO price for July 2011 was $1,009/ton. Continued uncertainty in Eurozone and sluggish demand from China are limiting upward price movements while lower soybean oil production expected in other countries is lending strength to future palm oil price prospects.

Refined/Bleached/Deodorized (RBD) Palm Oil FOB average price increased from $956/ton in June to $991/ton in July.


Improved export demand and domestic consumption for the month of June resulted in reduction in stocks at the end of June to 1.7 million tons. The stock level was 368,000 tons higher in June 2011.

Stocks rebounded in July and are estimate to be at about 2.2 million tons. The GOM announced a 2 million ton increase for the CPO tax free export quota to 5 million tons, which should lead to lower year-end stocks as well.


A preliminary official report shows a marginal increase in palm oil exports of 64,610 ton to 1.5 million tons in June.

Further Reading

You can view the full report by clicking here.

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