MPOC Sees CPO Prices Holding Steady in Near Term

Crude palm oil (CPO) prices are expected to trade between 4,200 and 4,500 ringgit per tonne in the near term, supported by a firm global vegetable oil market and supply uncertainty, according to the Malaysian Palm Oil Council (MPOC).

"Upside is capped by weak demand from key markets, while support comes from uncertainty over exportable supplies, particularly palm oil from Indonesia and soybean oil from the United States and Brazil, due to biodiesel policies.

"In addition, crude oil prices have stabilised around US$60 (252.36 ringgit) per barrel, with potential for further gains providing additional support to vegetable oils," MPOC said in a statement on Monday.

The third-month FCPO contract is currently trading around 4,464 ringgit per tonne on Bursa Malaysia Derivatives.

This comes as Malaysia's palm oil stocks rose to 2.20 million tonnes in August — the highest level since January 2024 — driven by a 43,000-tonne increase in production to 1.85 million tonnes, even as exports held steady at 1.32 million tonnes.

Despite the stock build-up, prices remain resilient amid broadly tight supplies across the vegetable oil complex, with palm oil gains in the third quarter posting a quarter-on-quarter increase of 10.9%.

Looking ahead, global vegetable oil demand is expected to outpace production in 2026, while biodiesel policies in major markets could further constrain export availability, MPOC added.

Production is expected to decline seasonally by November, which should help ease inventory pressure and keep prices well supported.

"At the same time, Indonesia's exportable palm oil could fall short of its potential if the government raises the biodiesel mandate to B50. These factors are likely to keep vegetable oil prices supported for the remainder of 2025," the council said.

Global soybean output growth is expected to slow sharply to 2.5 million tonnes in 2025/2026, down from a 27-million-tonne increase in 2024/2025, as farmers in the United States and Argentina shift acreage to more profitable crops.

MPOC noted that current soybean prices of US$10.40 per bushel on the CBOT are below the estimated US cost of production of around US$11.03 per bushel, citing the American Soybean Association.

"Although global soybean production will exceed consumption in 2026, the pace of stock build-up is expected to slow markedly compared with the past three years, easing downward pressure on soybean prices," the council said.

Vegetable oil stocks in key importing countries have also rebounded. India's vegetable oil stocks rose 41% to 1.86 million tonnes in August 2025, up from 1.33 million tonnes in May. In China, vegetable oil stocks have been rising since May, reaching 2.4 million tonnes in August 2025, up 21% year-on-year.

China's palm oil stocks stood at around 646,000 tonnes as of mid-September, equivalent to roughly three months of supply without imports.