Malaysia, the second largest palm oil producer, saw its palm oil stocks in August rising 12.37 percent month-on-month to 2.49 million tons, the highest since January.

According to Malaysian Palm Oil Board (MPOB) data released on Wednesday, the crude palm oil (CPO) production increased by 7.92 percent month-on-month to 1.62 million tons in August, while exports fell 8.11 percent to 1.1 million tons.

The rising stockpiles and lower than expected exports are likely to dampen the CPO price which is already in downtrend. According to MPOB, the CPO price has fallen 7.92 percent to 2,210 ringgit (531.83 U.S. dollars) per ton, from 2,400 ringgit as of the end of December last year.