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The Malaysian Palm Oil Council (MPOC) said on Tuesday it expects palm oil prices to remain above 4,300 ringgit per tonne (about US$1,018) in the near term, citing slowing supply growth and declining soybean oil availability amid strong biodiesel demand.
Crude palm oil was trading at 4,607 ringgit per tonne on Tuesday morning (06:00 GMT).
The council said whether prices hold at this level will depend on palm oil's ability to remain competitive against soybean oil in export markets, noting that palm oil typically tracks the price movements of rival vegetable oils as it competes for share in the global vegetable oil market.
According to the US Department of Agriculture (USDA), more than half of US soybean output is expected to be consumed domestically for biodiesel production by 2026. The council added:
"US soybean oil exports are projected to fall from 1.15 million tonnes in 2025 to just 310,000 tonnes in 2026."
Brazilian soybean oil exports may also struggle to expand after the biodiesel blending mandate was raised to 15% from 14%.
As a result, the council said, the global market will increasingly rely on Argentine supplies to bridge the gap, which will tighten availability of export-bound volumes and, in turn, support vegetable oil prices.
In Indonesia, plans to raise the biodiesel blending rate to 50% in 2026 — if implemented — would further tighten palm oil supply, with the country's requirements rising to 16 million tonnes from 13 million tonnes in 2025.
The council said it does not expect a significant build-up in palm oil stocks during September and October, noting that any decline in output in Peninsular Malaysia is likely to limit growth in national production for the remainder of the year.
Demand from India is expected to remain strong as importers stock up ahead of the Diwali festival season, while demand from Africa is also expected to stay steady.
Source: Bernama