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Palm oil prices are forecast to remain firm above RM4,600 per tonne in the coming month, driven by a combination of robust export figures and a seasonal downturn in production, according to the Malaysian Palm Oil Council (MPOC).
In a recent statement, the council highlighted that steady biodiesel consumption and India's strategic reduction in vegetable oil import duties are set to bolster demand for Malaysian palm oil in the near term. The anticipated seasonal decline in output is expected to draw down current stock levels. MPOC projects that Malaysian palm oil inventories will begin a downward trend from November 2026 through February 2027, offering significant price support throughout the final quarter of 2026.
Recent data shows that stockpiles of the versatile edible oil expanded by nearly 25% in September, reaching their highest levels on record. During the same period, production in Malaysia—the world's second-largest producer—surged by 16%. While palm oil production typically peaks between September and November before declining, the council notes that this year's output likely hit its zenith in September and is now entering a five-month seasonal decline.
On the export front, volumes contracted by 12% in September as Indonesian exporters rushed shipments ahead of new regulatory changes and higher export duties scheduled for October. Logistical challenges, including limited vessel availability in the Strait of Malacca, also hindered performance. However, MPOC describes the September export weakness as temporary, forecasting a significant rebound in shipments from October through December as shipping logistics improve.
Despite fluctuating from recent highs, palm oil prices have gained 18% year-to-date. This growth is supported by a global shift toward higher palm-based methyl ester blends in biodiesel to counter rising petroleum costs linked to regional conflicts. Palm oil futures on the Bursa Malaysia Derivatives stood at RM4,776 per tonne on Thursday. The council emphasized that elevated energy prices continue to underpin the vegetable oil market and biodiesel blending initiatives, particularly in Indonesia, where palm oil consumption for biodiesel reached a record monthly high in August.
Source: The Edge Malaysia