Malaysian Palm Oil Council forecasts CPO prices above RM4,450, supported by energy costs and biodiesel demand, despite West Asia volatility.
KUALA LUMPUR: Crude palm oil prices are expected to stay above RM4,450 per tonne in the near term. The Malaysian Palm Oil Council attributes this to elevated energy prices and a favourable palm oil-gasoil spread.
However, weaker economic growth and price volatility from West Asian uncertainties may temporarily delay imports from major markets. This could potentially cap the price rally.
“Vegetable oil prices moved into an uptrend in March after a prolonged consolidation since mid-2025,” the council said. It cited support from rising crude oil prices due to logistical disruptions in the Strait of Hormuz and force majeure declarations by several major oil refineries in West Asia.
MPOC said the sharp rise in gasoil prices has improved the competitiveness of biodiesel usage and blending. Brazil’s biodiesel industry has called for an increase in the blending mandate from B15 to B16.
Indonesia is also accelerating road tests for B50 blending to reduce import reliance. The implementation timeline for this, however, remains unclear.
On production, Malaysia’s palm oil output declined by 18.5% to 1.28 million tonnes in February. This drop of 293,000 tonnes was due to fewer harvesting days from the shorter month and the Lunar New Year holiday.
Palm oil exports remained robust in February, accounting for 88% of Malaysia’s production. This contributed to a lower stock level.
Cumulative exports from January to February increased by 18.7% to 2.58 million tonnes. India contributed the largest share of this increase.
