Malaysian crude palm oil production hit record highs in August, rising 13% MoM to just over 2 million tons, according to the latest data release from the MPOB. A 16.5% stock build saw inventory levels hit 1.46 million tons, which is slightly less than the market’s worst expectations. Despite this strong production, exports of crude palm oil dropped 2%. There was a stock build of 2% on processed palm oil, with exports increasing marginally by 0.45%.
Crude palm kernel production also soared by just under 30%, reaching 237,000t in August with exports up over 61%, and a build in stocks of 7%. Processed palm kernel stocks built marginally by just under 3%, with a small amount of 64,000t being exported.
Despite this considerable growth in Malaysian output, poor rainfall levels are continuing to stoke worries about Indonesian production. State oil firm Pertamina expects Indonesian biodiesel to consume more than 4 million tons of palm oil next year, more than three times as much as expected consumption this year. If Indonesia manages to hit its B20 target next year, 15% of palm oil produced will be used in biodiesel production.