USDA lowered projected 2021/22 world palm oil stocks by 149,000 MT in the January oilseeds update. A decline in Malaysian palm oil production was the major factor in the adjustment.
Production in Malaysia is now forecast at 18.7 MMT, down 1.0 MMT from the December estimate. Malaysia has struggled with adverse weather caused by La Niña and a severe labor shortage due to COVID-19-related restrictions on migrant workers.
The January forecasts for Indonesia palm oil S&D were unchanged from the previous month. If the 2021/22 estimate is realized, Indonesia’s palm oil production, at 44.5 MMT, would set a new marketing year record for the world’s top producer. Indonesia is expected to export 29.5 MMT this season, up from 26.9 MMT in 2020/21.
Global palm oil use is projected at 74.3 MMT, down 580,000 MT from December’s number but up slightly from last season.
Despite lower production, Malaysia is trying to hold onto its share in the export market—total exports are currently forecast at 16.2 MMT for 2021/22—and domestic consumption has declined from 2019/20 to make more supply available for the world market. USDA expects Malaysia to ship 16.2 MMT of palm oil, or 87 percent of the season’s production.
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