Yahoo Finance

(Bloomberg) -- Palm oil output in Malaysia fell the most since 2016 as heavy rains and floods disrupted harvesting in the world’s second-biggest grower.

Most Read from Bloomberg

• Nice Airport, If You Can Get to It: No Subway, No Highway, No Bridge

• Sin puente y sin metro: el nuevo aeropuerto de Lima es una debacle

• The Forgotten French Architect Who Rebuilt Marseille

• In New Orleans, an Aging Dome Tries to Stay Super

• How London’s Taxi Drivers Navigate the City Without GPS

At least five people were killed and thousands forced to move to safer places last month after days of heavy downpour triggered floods and landslides in several areas of the Southeast Asian nation. The states of Sarawak and Sabah, top oil palm growing areas, were among the worst affected, according to a statement from the country’s weather agency.

Shrinking supplies in Malaysia could further support the commodity that gained more than 5% in Kuala Lumpur last week. Prices jumped further on Monday, taking gains to 3.3% so far in 2025, after being down 3.6% for the year at the end of January.

Palm again commanded a premium over rival soybean oil — an unusual scenario as the commodity is generally the cheapest edible oil because of its round-the-year production, against the seasonal nature of other oilseeds. Oil palm also needs relatively less land to grow.

Palm has been trading higher than soyoil since September, except for about a month since Jan. 10.

Output in the country fell almost 17% from a month earlier to 1.24 million tons in January, according to data released by the Malaysian Palm Oil Board on Monday. That’s the lowest since April 2023 and below the median estimate in a Bloomberg survey last week.

Stockpiles dropped 7.6% to 1.58 million tons, missing all analyst estimates in the survey. Exports decreased almost 13% to 1.17 million tons, slightly better than the survey prediction.

The MPOB data is very supportive for prices, reinforcing concerns that supplies could be tight in the first quarter, said Sathia Varqa, an analyst at Fastmarkets Palm Oil Analytics in Singapore.

Most Read from Bloomberg Businessweek

• Trump’s Tariffs Make Currency Trading Cool Again After Years of Decline

• Trump Promised to Run the Economy Hotter. His Shock and Awe May Have a Chilling Effect

• The Reason Why This Super Bowl Has So Many Conspiracy Theories

• Believing in Aliens Derailed This Internet Pioneer’s Career. Now He’s Facing Prison

• Orange Juice Makers Are Desperate for a Comeback

©2025 Bloomberg L.P.