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Crude palm oil (CPO) prices are expected to remain range-bound between 4,000 and 4,300 ringgit per tonne in February, due to the seasonal decline in production and stocks, according to the Malaysian Palm Oil Council (MPOC).
In a statement issued yesterday, the council said a sustained rally in palm oil and other vegetable oil prices would require either a phased rollout of Indonesia's B45 biodiesel mandate, a recovery in crude oil prices, or clarity on US biofuel policy that would boost demand for soybean oil.
The council added: "Crude palm oil prices have held firm above the 4,000 ringgit per tonne level throughout January despite some fundamental headwinds, suggesting this price level represents a near-term structural floor with limited downside risk."
It continued: "Uncertainty over Indonesia's biodiesel policy has also eased following clarifications that the B50 biodiesel programme will be delayed, given the prevailing price relationship between palm oil and gasoil."
MPOC said that with talk of B50 biodiesel temporarily set aside, market attention has now shifted back to core fundamentals: production, export performance and stock levels.
Against this backdrop, the council said, global import demand for palm oil is expected to rise, potentially surpassing demand for soybean oil in the first quarter of 2026.
It said: "Despite palm oil's clear price advantage, India's import demand for palm oil has not yet fully recovered, likely due to the recent weakness of the Indian rupee against the ringgit."
The council explained: "This pullback should be viewed as temporary, as India will ultimately need to import palm oil regardless of currency movements, given its structural cost competitiveness."
In addition, Indonesia's announced increase in crude palm oil export levies to 12.5%, effective from 1 March 2026, is expected to boost Malaysia's market share of palm oil in India and contribute to a decline in domestic palm oil stocks.
Source: Bernama