PETALING JAYA: Crude palm oil (CPO) prices are expected to remain firm above RM4,600 per tonne in September, supported by tightening supply fundamentals and continued geopolitical disruptions to global trade flows, says the Malaysian Palm Oil Council (MPOC).
In a statement yesterday, MPOC said crude palm oil futures forward contracts for 2027 traded on Bursa Malaysia Derivatives were also above RM5,000 per tonne as of mid-August, reflecting market concerns over the potential impact of El Nino.
Furthermore, Indonesia’s palm oil demand for B50 biodiesel blending could also strengthen further as “the three-month transition period to clear the remaining B40 biodiesel stocks ends in September”.
However, the downside risks remain, MPOC said, adding that an easing of Black Sea logistical bottlenecks, the arrival of new-crop sunflower oil supplies in the export market, and lower energy prices as geopolitical tensions improve, could lead to a correction in vegetable oil prices.
Meanwhile, MPOC said palm oil stocks continued to increase in July, reaching 2.62 million tonnes.
However, the stock build-up in Malaysia is not a major concern as strong biodiesel demand and front-loading of exports in Indonesia have kept Indonesian palm oil stocks relatively low.
The price rally following the Malaysian Palm Oil Board’s release of its supply and demand data on Aug 10 further reinforced the view that current palm oil stock levels are not excessive, although overall supply remains comfortable for the time being.
MPOC also highlighted that the global vegetable oil market continued to be supported by biofuel demand and geopolitical uncertainty in August, with palm oil leading the gains.
Malaysian CPO prices rose by 3.9% during the month, compared with increases of 2.7% for sunflower oil and 1.1% for soybean oil in Argentina.
On local palm oil production, MPOC said production growth in the first seven months of 2026 was largely supported by an improvement in the oil extraction rate of fresh fruit bunches.
