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The Malaysian Palm Oil Council expects crude palm oil prices to remain supported above RM4,500 per tonne in the near term, driven by strong biodiesel economics, higher crude oil prices and the possible onset of El Niño.
The council said further gains may be limited by softer export demand amid inflation and weaker economic growth in major importing countries, along with rising stocks as palm oil production gradually enters its seasonal peak.
Since late February, vegetable oil prices have moved unevenly. Palm oil and U.S. soybean oil recorded stronger gains, while sunflower oil, canola oil and Argentine soybean oil posted smaller increases.
Palm oil and U.S. soybean oil have been the main beneficiaries of biodiesel policies and demand, supported by higher energy prices. Strong domestic demand in Southeast Asia is expected to absorb between 1.0 and 1.5 million tonnes of palm oil in the second half of 2026.
Malaysia may need an additional 300,000 tonnes annually under the B15 biodiesel mandate, while Indonesia would need substantially more palm oil if B50 is fully implemented.
The council also noted that lower rainfall in Malaysia since mid-March could provide further support to prices if weather risks intensify.
Malaysia’s palm oil stocks fell 16.1% to 2.26 million tonnes in March, while exports rose strongly. First-quarter exports increased 29.1% year-on-year, with North Africa recording the strongest growth, followed by South Asia.
Source: Bernama