Lang
Crude palm oil prices remain supported by positive fundamentals and higher demand from price-sensitive markets such as Pakistan and India, despite signs of rising production and inventories.
CGS International Research (CGSI Research) noted that Indonesia’s plans to implement a 50% biodiesel program, or B50, in 2026 and its call for local producers to increase domestic sales are supporting crude palm oil prices.
The research firm said recent price support from Indonesia’s biodiesel policies and domestic market obligations may be temporary, while abundant global vegetable oil supply and weak demand fundamentals will continue to limit any major increase in crude palm oil prices.
The research house expects pure upstream plantation companies to report stable earnings, with crude palm oil prices currently around RM4,200 per tonne.
Malaysia’s crude palm oil stock level rose to a 19-month high of 2.1 million tonnes in July, as production increased by 7.1% and exports fell to 1.3 million tonnes, down 22.9% year on year.
The export decline came despite a wider price advantage for crude palm oil over soybean oil in July, reaching $332 per tonne.
MBSB Research also noted that although the July price spread was 55% higher than the three-year average of $214 per tonne, demand for crude palm oil remained weak.
It expects this spread to narrow as fresh fruit bunch and crude palm oil production continue to recover amid ample inventory levels.
The research firm estimates that the average crude palm oil price will reach RM4,100 per tonne in 2025.
Malaysia’s crude palm oil production is expected to recover in 2025. Year-to-date output through July reached 10.77 million tonnes, 4% above the ten-year average for January-to-July production of 10.35 million tonnes.
Oil World, an independent global market analysis and forecasting firm, expects Malaysia’s total production to reach 19.3 million tonnes, while the US Department of Agriculture forecasts output at 19.4 million tonnes.
Kenanga Research expects Malaysia’s crude palm oil production in 2025 to reach 19.2 million tonnes, above the historical ten-year average of 19 million tonnes.
It also expects global vegetable oil supply and demand fundamentals to support crude palm oil prices during 2025 and 2026.