Palm Oil increased to a fresh top of 5777 MYR/T, boosted by stronger demand and supply constraints. Palm oil inventory is expected to remain tight in the near term as the first half of the year is the seasonal low production period for the oil palm plantation sector and amid anticipation of growing demand ahead of Eid al-Fitr holiday in May. Exports of Malaysian palm oil products for Feb 1 to 20 rose 24.9% to 825,193 tonnes from the same week in January.
At the same time, Malaysian Palm Oil Board said total palm oil inventory fell 3.85% to 1.55 million tonnes in January from 1.61 in December 2021 as production dropped by 13.54% to 1.25 from 1.45 million tonnes. Adding additional pressure, the world’s top palm oil producer, Indonesia, started to require producers to sell 20% of their planned exports to the domestic market and the recent rally in oil prices has boosted the demand for edible oils.