KUALA LUMPUR: Crude palm oil (CPO) prices are expected to trade between RM4,400 and RM4,650 per tonne in July, supported by the tightening supply outlook in Indonesia and rising El Nino risk, said the Malaysian Palm Oil Council (MPOC).
In a statement today, MPOC said that although oil palm plantations in Malaysia and Indonesia have yet to be affected as of June, the likelihood of a stronger El Nino emerging from July or August is increasing.
"A strong El Nino could reduce rainfall and bring drier conditions across Southeast Asia, Australia and India, although the impact on palm oil yields and production would only become evident after a lag of nine to 12 months,” it said.
MPOC said that Malaysia’s palm oil production declined by 6.9 per cent month-on-month to 1.51 million tonnes in May.
"The decline was partly due to oil palm trees temporarily entering a resting phase following higher-than-usual production between October 2025 and March 2026. In addition, May had two days of public holidays compared with none in April, resulting in fewer harvesting days,” it said.
Meanwhile, MPOC said that the drop in exports in May was largely anticipated, as slower purchasing activity in March and April amid heightened price volatility was expected to translate into lower shipments in May and June.
"Despite the monthly decline, cumulative exports from January to May 2026 increased by 783,000 tonnes or 13.8 per cent. The largest increases were recorded in exports to India, Kenya and Vietnam, which collectively rose by 749,000 tonnes.
"The Sub-Saharan Africa and ASEAN regions continue to emerge as important growth markets for Malaysian palm oil. In the first five months of 2026, these two regions accounted for 36 per cent of Malaysia’s total palm oil exports, compared with 25 per cent in 2022,” it added. - Bernama
