KUALA LUMPUR: Palm oil is expected to trade at between 4,200 ringgit and 4,500 ringgit ($998-$1,069) per metric ton in the next few weeks, caught between tight supply of vegetable oils and soft demand from key markets, the Malaysian Palm Oil Council said on Monday.
Palm oil futures on the Malaysian bourse ended morning trade at 4,464 ringgit, near the top end of the projected range.
Consumption of the four major vegetable oils - palm oil, sunflower, rapeseed and soybean - in 2026 is projected to outpace production growth, resulting in a modest supply deficit, the council said in a statement.
"Stronger soybean oil demand in the United States and Brazil, driven by higher biodiesel mandates, is expected to tighten global soybean oil export availability. At the same time, Indonesia’s exportable palm oil could fall below potential if the government raises the biodiesel mandate to B50. These factors are likely to keep vegetable oil prices supported through the remainder of 2025," the MPOC said.
The council said prices would be capped by weak demand from key markets, noting exports in August were largely unchanged from July. Shipments to the Asia-Pacific, Sub-Saharan Africa, European Union, North Africa and the Middle East recorded month-on-month increases, while exports to the Americas and South Asia posted marginal declines, it said.
It also said that global soybean production growth is expected to slow sharply to 2.5 million metric tons in 2025/26, down from the 27 million metric tons increase in 2024/25, as farmers in the U.S. and Argentina shift acreage to more profitable crops.
"Although global soybean production will still exceed consumption in 2026, the pace of stock accumulation is expected to slow significantly compared with the past three years, reducing downward pressure on soybean prices," it said.
MPOC added that palm oil stocks were expected to peak in October and then decline as production enters the low season in November. ($1 = 4.2080 ringgit) - Reuters
