Malaysia’s palm oil industry is facing a tough challenge as crude palm oil (CPO) stocks hit their highest level since February 2019, while exports continue to show weakness.
According to MBSB Research, CPO stocks in December 2025 rose to 3.05 million tonnes, driven by a 9.7 percent decline in exports to 15.3 million tonnes.
This was due to sluggish demand from key markets such as India, China and the European Union (EU).
However, while exports shrank, palm oil production performed well.
In 2025, the planted area increased to 5.70 million hectares, while CPO production reached a record 20.28 million tonnes.
Productivity also improved with the oil extraction rate (OER) increasing to 19.74 percent.
To maintain competitiveness, plantation companies are now focusing on mechanization, replanting and improving operational efficiency.
At the same time, MPOB will introduce a new system in 2026 that integrates GeoSAWIT and e-MSPO to increase supply chain transparency and ensure compliance with global regulations such as EUDR.
Looking ahead, MBSB expects MSM production to increase slightly to 20.48 million tonnes in 2026, but exports are forecast to decline to 15.1 million tonnes, indicating that the challenges for the country's palm oil industry are still not over.
