Core Viewpoint - The Malaysian Palm Oil Board (MPOB) released the palm oil supply and demand data for August 2025, indicating that production and inventory levels are in line with market expectations, leading to a neutral to slightly bearish impact on the market [1][2]. Production and Supply - In August, Malaysia's palm oil production reached 1.855 million tons, a month-on-month increase of 2.35%, but a year-on-year decrease of 2.05% [2][4]. - The production in different regions showed variability: Peninsular Malaysia's production decreased by 1.82% to 1.107 million tons, while Sabah and Sarawak saw increases of 3.98% and 14.56%, respectively [4][6]. - The average yield of fresh fruit bunches (FFB) increased by 6.54% to 1.63 tons per hectare, with regional yields varying significantly [6]. Exports and Imports - Palm oil exports in August were 1.3247 million tons, a slight decrease of 0.29% month-on-month and a significant year-on-year drop of 13.14% [2][8]. - Imports fell sharply by 19.66% to 49,000 tons, while domestic consumption rose to approximately 491,000 tons, marking a 6.16% increase and the highest level in nearly three years [10][12]. Inventory Levels - As of the end of August, palm oil inventory rose to 2.2025 million tons, a month-on-month increase of 4.18% and a year-on-year increase of 16.96%, indicating a high level compared to the past five years [2][12]. Market Outlook - The market is expected to remain under pressure in the short term due to continued inventory accumulation and weak export performance, with palm oil prices likely to fluctuate between 9,200 and 9,650 yuan per ton [14]. - Despite the bearish sentiment, there are potential bullish drivers, including expectations of interest rate cuts by the Federal Reserve and supportive external vegetable oil market conditions [14].