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Palm oil industry experts have voiced an optimistic outlook for the plantation sector, driven by tight global supplies, strong biodiesel demand and targeted government interventions.
TA Research, which recently attended the 21st Indonesian Palm Oil Conference and 2026 Price Outlook in Bali, Indonesia, said key speakers at the conference expected palm oil production to rise in 2025, while forecasts for 2026 remained mixed.
Most speakers noted that Indonesia's B50 biodiesel mandate is still at the trial stage and is unlikely to gain significant momentum until 2027. Prices could see short-term volatility due to seasonal production cycles and geopolitical developments.
Overall, limited global stocks, structural supply constraints and growing biodiesel mandates are expected to lend bullish support to palm oil and related edible oils throughout 2026.
TA Research said some of the issues highlighted during the conference included the strengthening of smallholders and sustainability in Indonesia's palm sector, its biodiesel programme, growth and challenges, as well as strategic trends and shifts in the edible oil markets of India and Pakistan.
On crude palm oil (CPO) price forecasts, the most bullish projections saw Malaysian crude palm oil futures reaching 5,000 ringgit per tonne by the end of the year, with a possible rise to 5,500 ringgit per tonne in early 2026.
Sathia Varqa, senior analyst at Fastmarkets Palm Oil Analytics, said palm prices could climb to between 4,500 and 4,600 ringgit per tonne on the active crude palm oil futures contract in the fourth quarter of 2026, coinciding with the seasonally low production period.
He also noted that the palm oil sector faces immediate challenges, as current prices are approaching the price of "green oil", causing it to lose market share — a trend clearly reflected in the sharp decline in Malaysian exports to India.
Mohammad Fadhil Hasan, head of foreign affairs at the Indonesian Palm Oil Producers Association (Gabungan Pengusaha Kelapa Sawit Indonesia, GAPKI), said the price outlook is strong, and palm oil is no longer considered a discounted oil.
Fadhil forecast that crude palm oil prices would remain elevated, ranging between US$1,050 and US$1,150 per tonne through the first quarter of 2026.
Meanwhile, Dorab Mistry, director of Godrej International Trading and Investments Pte Ltd, said Malaysian palm oil futures could reach 5,000 ringgit per tonne by the end of December 2025, with the potential to rise to 5,500 ringgit per tonne in the first quarter of 2026.
This would be especially likely if Indonesia continues land acquisitions, imposes restrictions on domestic market obligation commitments, or accelerates the shift towards B50 biodiesel.
In short, Dorab said supply constraints, government interventions and strong biodiesel demand are expected to support a bullish outlook for palm oil and related edible oils in 2026.
TA Research maintained a "neutral" stance on the plantation sector.
Source: The Star