KUALA LUMPUR: Crude palm oil prices (CPO) are expected to remain range-bound between RM4,000 per tonne and RM4,300 per tonne in February due to seasonal declines in production and stocks, according to the Malaysian Palm Oil Council (MPOC).
In a statement today, the council said that a sustained price rally in palm oil and other vegetable oils would require either a progressive rollout of Indonesia’s B45 biodiesel mandate, a recovery in crude oil prices, or clarity on the United States biofuel policy that boosts soybean oil demand.
"CPO prices have remained firm above RM4,000 a tonne throughout January despite some fundamental headwinds, indicating that this price level is forming a near-term structural floor with limited downside risks.
"Indonesia’s biodiesel policy uncertainty has also eased following the clarification that the B50 biodiesel programme will be postponed due to the prevailing price relationship between palm oil and gas oil,” it said.
MPOC said that with the B50 biodiesel narrative temporarily sidelined, market attention has now shifted back to the core fundamentals -- production, export performance and stock levels.
It noted that, against this backdrop, global import demand for palm oil is expected to strengthen, potentially surpassing that for soybean oil in the first quarter of 2026.
"Despite palm oil’s clear price advantage, India’s import demand for palm oil has yet to fully recover, likely due to the recent weakening of the Indian rupee against the ringgit.
"This setback should be viewed as temporary, as India will ultimately need to import palm oil regardless of currency movements, given its structural cost competitiveness,” it said.
In addition, Indonesia’s announced increase of the CPO export levy to 12.5 per cent from March 1, 2026, is expected to improve Malaysia’s palm oil market share in India and contribute to a drawdown in domestic palm oil stocks.
"Seasonal factors are also expected to support prices. February’s shorter trading month, combined with multiple public holidays such as Thaipusam, Lunar New Year and the fasting month, is likely to weigh on harvesting productivity and constrain near-term supply,” it said. - Bernama
