Malaysia's palm oil stocks have climbed to record levels, pressing storage
capacity in key producing regions. Industry sources say output in Sarawak on
Borneo has exceeded expectations and a surge in freight rates has slowed
shipments, leaving local storage tanks nearing capacity. As the world's
second-largest palm oil producer, Malaysia's September stocks rose to a record
3.51 mln t and monthly production hit a historic high, with the seasonal October
peak not yet arrived. Rising inventories have increased pressure on the
government to clear backlogs; officials are considering exempting crude palm oil
export tax to boost overseas sales. The supply glut has weighed on prices: Kuala
Lumpur benchmark futures fell as much as 2.2% on Tuesday, the largest drop in
over a month and trading near a four-month low reached in early October. The
price decline has widened palm oil's discount to competing vegetable oils,
supporting this month's exports, but elevated stocks limit upside for a
sustained rebound.
