Malaysia’s Palm Oil Inventories Hit 19-Month High Amid Export Decline, Aging Farmers, Reduced LNG Exports, US Trade Deal

Palm oil inventories in Malaysia have reached their highest level since December 2023, driven by a rebound in production in the world's second-largest producer, according to a Bloomberg survey. Despite the inventory increase, exports from Malaysia have declined. The outlook for palm oil supply is challenged by aging trees and an aging farming workforce, which may constrain output from top exporters Malaysia and Indonesia in the coming years. Additionally, Malaysia and Indonesia are expected to reduce their liquefied natural gas (LNG) exports, potentially tightening global LNG supply. In response to shifting trade dynamics, Malaysia has agreed to increase technology and LNG purchases from the United States as part of a trade deal.