Stockpiles in the world's No.2 producer and exporter of palm oil, used to make products ranging from cooking oil to chocolate, rose 1.5 percent from the previous month to 2.54 million tonnes, according to the data from the Malaysian Palm Oil Board (MPOB).
Rising inventories could weigh on benchmark prices , which were up 0.3 percent at 2,212 ringgit ($532.82) a tonne at the midday break.
The climb came despite exports jumping 47.2 percent from August to their highest in over two years at 1.62 million tonnes. That also marked their biggest monthly gain since October 2006.
"Due to the zero export tax rate, India and China lifted demand," said David Ng, a derivatives specialist at Phillip Futures in Kuala Lumpur.
Ng added that India's demand was also stoked by stronger buying ahead of the Hindu festival of Diwali celebrated in early November, while a weaker ringgit made palm oil more affordable for Chinese buyers.
"Moving forward, we'll have to see how key countries sustain exports. The export pace may continue in October but at a lower rate than September, which could pressure the market."
Malaysia cut its crude palm oil export tax for September to zero from 4.5 percent in August. It has kept the rate at zero for October.
The MPOB also reported that September production rose 14.4 percent from August to its strongest in 10 months at 1.85 million tonnes. That was also the highest September level since 2015.
Traders and analysts said production was in line with market expectations, and was seen peaking in the final quarter of the year.
"There is strong output still this month on bumper crops and supportive weather," said William Simadiputra, an analyst at DBS Vickers Securities. "We forecast output will peak in October before declining in November and December."
A Reuters survey had forecast palm oil's end-September stockpiles to edge down 0.7 percent to 2.47 million tonnes, while production was seen up 14.7 percent at 1.86 million tonnes. Exports were also forecast to jump 50 percent to 1.65 million tonnes.