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Crude palm oil (CPO) prices are projected to revisit the RM5,000-per-tonne threshold as early as the first quarter of 2027. This forecast, shared by industry analyst Thomas Mielke, executive director of ISTA Mielke GmbH, stems from anticipated volatility in the sunflower oil sector and the ongoing geopolitical ramifications of the Russia-Ukraine conflict.
During a panel discussion at the Malaysian Palm Oil Forum (MPOF) in Kuala Lumpur, Mielke highlighted that free-on-board (FOB) palm oil prices could similarly climb back to US$1,300 per tonne. While the precise timing remains subject to market conditions, Mielke suggested that these price levels might materialize as soon as January of the forecast year.
The discussion, moderated by CNN correspondent Eleni Giokos, featured insights from prominent industry figures including Dr. Julian McGill of Glenauk Economics and Nikhil Vallabhan of Frost & Sullivan. Mielke noted that developments regarding the Black Sea sunflower oil corridor will play a pivotal role in supporting palm oil’s price trajectory.
Looking at long-term supply dynamics, Mielke observed a significant slowdown in production growth. Global palm oil output is expected to expand by approximately 1.3 million tonnes annually over the decade leading to 2030, a sharp decline from the average annual growth of 2.9 million tonnes recorded between 2010 and 2020.
Despite the slowing growth, palm oil remains the dominant force in the global oils and fats landscape, accounting for 31% of total production and 49% of global exports this year. Mielke concluded that the commodity has reached a stage where it no longer requires steep price discounts to maintain its market share, barring brief intervals of temporary oversupply.
Source: KLSE Screener