Lang
Crude palm oil (CPO) prices are expected to stabilize over the long term, according to sources cited by The Star in a report published on May 6.
The report said crude palm oil prices had fallen to their lowest levels in nearly 11 months, with further declines expected because of weaker global demand for vegetable oils.
According to data from the Malaysian Palm Oil Board (MPOB), crude palm oil prices in May reached RM3,968, or $936, per tonne. This was down 26% from the one-year high of RM5,333.50, or $1,258, recorded in early December 2024.
The report said traders remained cautious, with the July 2025 delivery contract at around RM3,801.64, or $896, per tonne.
Angeline Chin, senior research manager at TA Securities Holdings, said she expects palm oil prices to face further downside pressure in the near term due to several negative factors, led by slower demand for vegetable oils.
She added that palm oil is also entering its peak production season, which is likely to raise inventory levels and increase pressure on prices.
Chin said competing oils are also weighing on palm oil prices, as trade tensions continue to affect soybean exports negatively.
In the same context, The Star noted that large soybean flows from South America, especially Brazil, have helped ease concerns about global supply.
The latest USDA report also showed that US soybean planting is progressing ahead of both historical averages and market expectations.
Chin said this development reinforces the bearish outlook for soybean oil, adding further downward pressure on palm oil prices.
She added that persistently lower crude oil prices make biofuel policies less economically viable, reducing optional demand for palm oil in the energy sector.
By contrast, Najib Wahab, deputy secretary-general of the Council of Palm Oil Producing Countries (CPOPC), was more optimistic, expecting prices to range between RM3,800 and RM4,200, or $896 to $900, per tonne.
He said the current decline is due to inventory build-up caused by the current peak production season and that he believes the trend will ease after June this year.
Although uncertainty over tariffs may affect prices, Wahab said he expects prices to stabilize over the long term.
He concluded that the US-China trade war could create additional demand for palm oil, as China will need an alternative to its imports of US soybean oil.