Malaysia expects palm oil exports to hold near 16 million tonnes in 2027
Malaysia expects palm oil exports to remain near 16 million tonnes in 2027 as lower Indonesian output and stronger Indonesian biodiesel demand restrict competing supply. Malaysian stocks reached 2.82 million tonnes in August 2026, but MPOC expects the country to become more important to global buyers.
Exports forecast to remain stable
Malaysia’s palm oil exports are expected to remain close to 16 million tonnes in 2027, according to the Malaysian Palm Oil Council. The forecast indicates that shipments will be broadly stable even as production declines in Malaysia and Indonesia, the industry’s two principal origins.
Citing independent global market analysis and projections from Oil World, MPOC said Indonesian palm oil production is expected to fall by 1.9 million tonnes in 2027. Malaysian production is projected to decline by 0.7 million tonnes. Indonesian exports could fall by almost 3 million tonnes as higher biodiesel blending strengthens domestic demand while weaker production limits available supply.
MPOC said these conditions would make Malaysia an increasingly important source of palm oil for global consumers. Stable Malaysian exports would therefore provide some continuity for buyers facing reduced availability from Indonesia, although the projected decline in Malaysia’s own output limits its ability to replace all lost Indonesian shipments.
Stocks rise as August shipments weaken
Malaysia entered the outlook period with substantial inventories. Palm oil stocks increased to 2.82 million tonnes in August 2026 as a modest rise in production coincided with lower exports. MPOC considers the current high stock level likely to be temporary.
Production rose 1.4% from July to 1.81 million tonnes in August, supported by increased harvesting of fresh fruit bunches and a better oil extraction rate. Output nevertheless remained below its year-earlier level, extending the run of annual declines to a sixth consecutive month since March 2026.
August exports fell 7.5% from the previous month to 1.29 million tonnes because of lower shipments to South Asia and the Middle East. The monthly setback contrasts with stronger cumulative performance: exports from January through August increased by 806,000 tonnes to 10.4 million tonnes.
Prices supported by supply and energy risks
For full-year 2026, MPOC forecasts Malaysian palm oil exports at 16.0 million tonnes, 5.2% above the 2025 total. The similar projection for 2027 suggests Malaysia may preserve shipment volumes rather than expand them, despite an expected contraction in Indonesian exports.
MPOC expects crude palm oil prices to remain firm above RM4,700 per tonne in October and potentially through the rest of 2026. Weather uncertainty and supportive energy markets underpin that view. The council identified lower energy prices and a further increase in stocks as the main downside risks, particularly because palm oil production normally reaches its seasonal peak in September or October.
For refiners, importers and traders, the balance between Malaysia’s inventories and declining regional production will be central to availability in 2027. High stocks can support near-term shipments, but lower projected output in both major producing countries leaves less room to absorb weather disruptions or additional biodiesel demand. Malaysia’s ability to maintain exports near 16 million tonnes will consequently carry greater weight in the global vegetable-oil market.
