PETALING JAYA: Palm oil industry experts have expressed a bullish outlook for the plantation sector driven by tight global supply, strong biodiesel demand, and targeted government interventions.
The TA Research team, which recently attended the 21st Indonesian palm oil conference and 2026 price outlook in Bali, Indonesia, said top speakers at the conference expected palm oil production to increase in 2025, while the outlook for 2026 remained mixed.
Most speakers noted that Indonesia’s B50 biodiesel mandate is still in the trial phase and would unlikely gain significant traction until 2027.
Short-term price volatility is possible due to seasonal production cycles and geopolitical developments.
Overall, tight global stocks, structural supply constraints, and rising biodiesel mandates are expected to keep upward support for palm oil and related edible oils throughout 2026.
Some of the issues highlighted during the conference include strengthening smallholders and sustainability in Indonesia’s palm sector, its biodiesel programme, growth and challenges as well as trends and strategic shifts in India and Pakistan’s edible oil markets, said TA Research.
On the crude palm oil (CPO) price outlook, the most optimistic projections expected Malaysian CPO futures could reach RM5,000 per tonne by year-end and potentially climb to RM5,500 per tonne in early 2026.
Fastmarkets Palm Oil Analytics senior analyst Sathia Varqa said palm prices could surge to RM4,500 to RM4,600 per tonne on the active-month CPO futures contract in fourth quarter of 2026, coinciding with the seasonally low production period.
He also cited the palm oil sector is facing immediate challenges, as current prices are nearly on par with “green oil,” causing a loss of market share, notably reflected in the sharp decline of Malaysian exports to India.
Gabungan Pengusaha Kelapa Sawit Indonesia head of foreign affairs division Muhammad Fadhil Hasan noted the price outlook is strong, with palm oil no longer considered a discounted oil.
Fadhil expected CPO prices to remain high, to be in the range of US$1,050 to US$1,150 per tonne until 1Q26
Dorab Mistry, who is director of Godrej International Trading and Investments Pte Ltd, meanwhile, said Malaysian palm oil futures could reach RM5,000 per tonne by end-December 2025, with potential to climb to RM5,500 per tonne in 1Q26.
This in particular if Indonesia continues land seizures, imposes domestic market obligation restrictions, or accelerates the shift toward B50 biodiesel.
In summary, Dorab said supply limitations, government interventions and strong biodiesel demand are expected to underpin a bullish outlook for palm oil and related edible oils in 2026.
TA Research maintained a “neutral” stance on the plantation sector.
