20/08/2025

BIZ & FINANCE WEDNESDAY | AUG 20, 2025

15 India’s purchases of M’sian palm oil surge

in August, before declining from September onwards. While Sabah and Sarawak have yet to reach their peak months, any downturn in Peninsular Malaysia from September is expected to cap national production growth for the rest of the year. As a result, Malaysia’s palm oil stocks are unlikely to see a major built-up in September and October. CPO prices have recently soared above RM4,500 per tonne and may remain volatile in weeks ahead. Despite the fluctuations, prices are expected to hold above RM4,300 in the near term. Tightening soybean oil export availability, combined with the prospect of slower palm oil supply growth relative to biodiesel demand should provide continued support. However, the sustainability of palm oil’s price strength will depend on its competitiveness against soybean oil in the export market.

largely attributed to higher shipments of E&E products (+RM11.6 billion); machinery, equipment & parts (+RM936.1 million); palm oil-based manufactured products (+RM529.7 million); optical & scientific equipment (+RM492.3 million); processed food (+RM440.5 million); and metalliferous ores & metal scrap (+RM224.7 million). In addition, import growth was driven by higher inflows of electrical & electronic products (+RM5.4 billion); crude petroleum (+RM771.2 million); optical & scientific equipment (+RM741.3 million); transport equipment (+RM443.2 million); other manufactures (+RM385.6 million); and palm oil & palm-based agriculture products (+RM380.6 million). Additionally, he also underscored the upsurge in imports by End Use reflected increased demand for capital good. Imports of capital goods (14.5% of total imports), climbed by 20.6% or RM3.1 billion to post a value of RM18.2 billion. However, consumption goods (8.3% of total imports), downed by 5% Brazil’s soybean oil exports may also struggle to expand despite record soybean harvests and higher crushing volumes, as the country raised its mandatory biodiesel blend from 14% to 15% on Aug 1. As a result, the global market will increasingly rely on Argentine supplies to cover the shortfall. This tightening in export availability is likely to support vegetable oil prices, including palm oil. Indonesia is also considering raising its biodiesel mandate to B50 in 2026. If implemented, the policy would require about 16 million tonnes of palm oil annually for that 52% of US soybean oil production will be used domestically for biodiesel in 2026, rising by 1.5 million tonnes (26.7%) to 7 million tonnes. This surge in domestic use will sharply reduce export availability. US soybean oil exports are forecast to drop from 1.15 million tonnes in 2025 to just 310,000 tonnes in 2026.

blending, up 3 million tonnes from an estimated 13 million tonnes in 2025. However, global palm oil output is projected to grow only by 1.6 million tonnes in 2026 to 83.1 million tonnes, with most of the increase coming from Indonesia, according to Oil World. With supply growth lagging behind biodiesel demand, palm oil prices are likely to stay firm. On the supply side, Malaysia’s production patterns have also shifted. In 2024, Malaysia’s palm oil production peaked unusually early at 1.89 million tonnes in August, compared with the historical peak in October. Peninsular Malaysia recorded an exceptionally strong output in July 2025 of 1.12 million tonnes – the highest July production in a decade and also the highest monthly output for the region in 10 years. This suggests that Peninsular Malaysia’s production may have already peaked in July or could peak

Comparing with June 2025, exports, imports, total trade and trade balance recorded an increase of 15.5%, 10.9%, 13.3% and 78.2%, respectively. From a commodity group perspective, 140 out of 258 export groups and 118 out of 259 import groups showed an increase as compared to the same month of the previous year. Mohd Uzir said higher exports was primarily driven by increased shipments to Singapore (+RM4.7 billion), followed by Taiwan (+RM2.5 billion), Mexico (+RM1 billion), China (+RM1 billion), the US (+RM680.2 million), the European Union (+RM589.4 million) and the UAE (+RM394.6 million). Moreover, the increase in imports was mainly attributed to higher inflows from Taiwan (+RM5.2 billion), followed by China (+RM1.7 billion), Republic of Korea (+RM1.6 billion), Vietnam (+RM825.2 million), Oman (+RM755.7 million), Sudan (+RM696.7 million) and Saudi Arabia (+RM679.7 million). Further commenting on exports, Mohd Uzir said the increase was Rising US domestic feedstock requirements have pushed US soybean oil prices to a significant premium in August – US$131 per tonne above Argentine soybean oil and US$148 per tonne above Malaysian palm olein. The strength in US soybean oil prices has lifted the broader vegetable oils complex. Looking ahead, the USDA projects 300,000 tonnes, providing additional support for exports. “Although Malaysian palm oil stocks have been rising since February, supply pressure remains limited. At the same time, Indonesia’s biodiesel programme remains on track, consuming more than 1 million tonnes of palm oil monthly since February, preventing a stock built-up in the country, said MPOC. The council said the biofuel market has exerted a strong influence on vegetable oil market in July and August.

KUALA LUMPUR: India’s palm oil imports from Malaysia surged 16% in July 2025 to 301,000 tonnes, the highest in nine months, even as Malaysia’s palm oil inventories climbed to a 19-month high of 2.11 million tonnes on slower pace of exports, said Malaysian Palm Oil Council (MPOC). In a statement yesterday, it said demand from India is expected to remain firm in September as importers stock up ahead of Diwali. Sub-Saharan Africa is also projected to maintain steady imports of about demand expected to stay firm in near term o July imports highest in nine months, performance recorded a positive growth in July 2025 with a total trade exhibiting an increase of 3.8% from RM256.2 billion in the previous year to RM265.9 billion. This performance primarily driven by a marginal growth in imports by 0.6%, reaching RM125.5 billion and exports by 6.8%, valued at RM140.4 billion in July 2025, according to the Department of Statistics Malaysia yesterday. Chief Statistician Malaysia Datuk Seri Dr Mohd Uzir Mahidin said, Malaysia’s exports increased in July 2025 in tandem with the rise in re exports (26.4% to total exports) escalated by 42% as compared to July 2024, worth RM37 billion. On the other hand, domestic exports (73.6% to total exports), downed by 1.9% to RM103.4 billion. Meanwhile, imports worth RM125.5 billion recorded marginal increase of 0.6%. Trade surplus escalated by 120.7% to RM15 billion, 63rd consecutive month of surplus since May 2020.

July trade rises to RM265.9b, surplus widens PUTRAJAYA: Malaysia’s trade

growth in exports (+4.3%) and imports (+5.1%). Nonetheless, trade surplus decreased by 4.7% to post a value of RM70.3 billion as compared to the same period in 2024.

or RM546.3 million to post a value of RM10.4 billion. Malaysia’s total trade for the period of January to July 2025 improved by 4.7% to RM1.7 trillion, supported by