The latest February Supply & Demand report from the Malaysia Palm Oil Board (MPOB) reveals a 10.18% decrease in the production of Crude Palm Oil (CPO). Palm Oil (PO) exports also experienced a 24.75% reduction compared to December. Consequently, the decrease in both production and export resulted in a dip of 5.00% in Total Palm Oil (TPO) stocks, reaching 19.19 LMT. The MPOB data suggests a bullish momentum, as both palm oil production and ending stocks have decreased despite a notable drop in palm oil exports. Despite this, BMD Palm oil futures seem to have factored in the impact of reduced production and ending stocks, holding steady at around 4106 MYR/MT.

March typically sees a rebound in palm oil production, which could put pressure on international palm oil prices. Currently, the price gap between palm oil and competing oils has narrowed, but the anticipated production increase in March could widen this gap again, leading to renewed export demand from India and China.