KUALA LUMPUR: Palm oil prices are expected to remain supported at RM3,900 per tonne in the coming weeks, underpinned by the recovery in soybean oil prices, which enhances palm oil’s price competitiveness, according to the Malaysian Palm Oil Council (MPOC).
It said the ongoing decline in palm oil production in Sabah remains a concern and will likely limit any significant production recovery in the coming months.
“Despite these supportive factors, a strong rally in vegetable oil prices is unlikely, as escalating trade conflicts and soft crude oil prices imply higher risk and price volatility,” it said in a statement yesterday.
The MPOC noted that Malaysian palm oil stocks increased in March 2025 after six consecutive months of decline, rising to 1.56 million tonnes.
The increase was driven by a 16.8% month-on-month rise in palm oil production, following delayed harvests in February due to heavy rainfall and flooding.
Despite the recovery in March, cumulative production for the first quarter of 2025 remains the lowest in three years, and year-on-year production declines are likely to persist until September.
“As a result, total palm oil production in 2025 could fall to around 19 million tonnes – below the 19.3 million tonnes recorded in 2024,” the council said.
Palm oil has recently regained its price competitiveness against soft oils, trading at a premium in the global market since August 2024.
At RM3,900 per tonne, palm oil is now considered reasonably priced.
As a result, China is projected to increase its palm oil imports in May and June to replenish inventories, coinciding with the onset of the summer season, which typically sees higher palm oil consumption in the country, it said.
Similarly, India is expected to capitalise on the current low palm oil prices to replenish its depleted inventories, as the price gap between palm oil and soybean oil has narrowed in the domestic market. — Bernama
