{
  "id": 6696790,
  "title": "Palm oil stocks swell to year's high, but supply squeeze looms",
  "url": "https://urgent.news/2026/09/11/palm-oil-stocks-swell-to-years-high-but-supply-squeeze-looms",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-09-11T03:37:23.000Z",
  "source": {
    "name": "New Straits Times",
    "slug": "new-straits-times",
    "url": "https://www.nst.com.my/business/economy/2026/09/1530339/palm-oil-stocks-swell-years-high-supply-squeeze-looms"
  },
  "original_language": "en",
  "account": "Malaysia's palm oil stocks reached a yearly high in August, but industry experts anticipate a potential supply shortage next year due to a strengthening El Nino. The inventory of crude palm oil (CPO) reached 2.82 million tonnes, the highest level this year. Despite the high stock levels, the futures market shows a premium for palm oil in the early 2027 period compared to near-term prices. Analysts predict that CPO prices will average between RM4,400 and RM4,500 a tonne this year, with some forecasts suggesting higher prices in 2027 due to El Nino's impact on production. RHB Research predicts inventories will stay above two million tonnes this year and rise further in the coming months as production peaks in Q4. CIMB Securities expects inventories to increase by 5.3% month-on-month to 2.98 million tonnes in September. The dry conditions and low rainfall in Indonesia and Malaysia have raised concerns about future supply, with some anticipating a very strong El Nino event with a 95% probability from October to December. The global vegetable oil market may also support palm oil prices due to reduced exports from Russia and Ukraine, potentially encouraging substitution towards palm oil, especially as Indian refiners increase sunflower oil purchases between October and March. However, Malaysian palm oil exports fell 7.5% month-on-month and 2.4% year-on-year in August, reflecting weaker demand amid elevated CPO prices. Despite higher inventories, experts maintain a generally positive outlook on CPO prices and the plantation sector, with earnings expected to improve in the third quarter due to higher CPO average selling prices and fresh fruit bunch (FFB) production.",
  "summary": "KUALA LUMPUR: Malaysia may be awash with palm oil now, but the market is already bracing for a potential supply squeeze next year as a strengthening El Nino threatens production.",
  "key_points": [
    "Malaysia's palm oil stocks hit yearly high in August at 2.82 million tonnes.",
    "El Nino expected to cause supply squeeze next year.",
    "Analysts predict CPO prices averaging RM4,400-RM4,500 per tonne in 2027."
  ],
  "editors_take": "A surge in palm oil stocks in Malaysia, driven by high production, contrasts with looming concerns over future supply shortages due to El Nino's impact, potentially supporting prices.",
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}