RHB Research has raised its CPO price assumptions to RM4,350 per tonne for 2025 from RM4,100 and RM4,250 per tonne for 2026 from RM4,000.
PETALING JAYA: Crude palm oil (CPO) prices are expected to remain volatile in the near term as geopolitical uncertainties and policy shifts continue to weigh on global vegetable oil markets.
However, the medium-term outlook remains balanced, supported by Indonesia’s upcoming B50 biodiesel mandate.
RHB Research has raised its CPO price assumptions to RM4,350 per tonne for 2025 from RM4,100 and RM4,250 per tonne for 2026 from RM4,000, while maintaining a “neutral” sector call.
Its top stock picks include Johor Plantations Group Bhd
, IOI Corp Bhd, SD Guthrie Bhd and Sarawak Oil Palms Bhd.
“We expect CPO prices to remain volatile in the short term, given the current geopolitical situation. We now assume a half-year impact of Indonesia’s B50 mandate and hike 2025 to 2026 CPO prices.”
Spot CPO prices have rebounded to RM4,400 to RM4,500 per tonne from a May low of RM3,780, helped by the postponement of the US-China tariff decision and expectations that China may stock up on US soybeans. The Indonesian government’s commitment to its B50 biodiesel programme, albeit with a delayed start in 2026, also lent support to the rally.
However, RHB Research cautioned that the US-China trade conflict remains a key headwind. Despite the 90-day tariff extension to November, “China is still not buying US soybean and continues to stock up on South American soybean,” the report noted.
The latest 100% tariff imposed by the United States on Chinese exports could worsen the standoff, while Argentina’s temporary removal of export taxes on soybeans, corn, wheat and biodiesel from Sept 22 to end-October 2025 has shifted more Chinese buying to Argentina and Brazil.
China’s reliance on Brazil is now at a record high – 76% of Brazil’s soybean exports in the first eight months of 2025 went to China, up from the usual 65% to 75%.
This has left the United States with surplus soybean stocks. Oil World forecasts that the end-August 2026 stock-to-usage ratio will hit 12%, a multi-year high, while the global soybean ratio could rise to 29.5%, keeping soybean oil (SBO) prices under pressure.
With the CPO-SBO price discount narrowing by 55% to just US$42 per tonne in recent weeks, palm oil’s competitiveness could weaken further.
“Should SBO prices decrease further, this could result in demand for palm oil being destroyed,” the research house warned, citing India’s earlier shift from CPO to SBO that caused a year-to-date 18% drop in palm oil imports as of August 2025. The report also highlighted weather risks.
