CPO Prices To Remain Above RM4,600 In September On Tightening Supply, Geopolitical Disruptions -- MPOC
KUALA LUMPUR, Aug 19 (Bernama) -- Crude palm oil (CPO) prices are expected to remain firm above RM4,600 per tonne in September, supported by tightening supply fundamentals and continued geopolitical disruptions to global trade flows, said the Malaysian Palm Oil Council (MPOC).
In a statement today, the council said CPO futures (FCPO) forward contracts for 2027 traded on Bursa Malaysia Derivatives were also above RM5,000 per tonne as of mid-August, reflecting market concerns over the potential impact of El Nino.
It said Indonesia’s palm oil demand for B50 biodiesel blending could strengthen further as the three-month transition period to clear the remaining B40 biodiesel stocks ends in September.
“However, downside risks remain. An easing of Black Sea logistical bottlenecks, the arrival of new-crop sunflower oil supplies in the export market and lower energy prices as geopolitical tensions improve could lead to a correction in vegetable oil prices,” it added.
MPOC said Malaysia’s palm oil production rose 9.4 per cent month-on-month (m-o-m) to 1.79 million tonnes in July 2026, an increase of 154,000 tonnes.
However, production remained below last year’s level, marking the fifth consecutive month of year-on-year decline since March 2026.
It said export performance strengthened further in July, with shipments rising 14.5 per cent m-o-m to 1.39 million tonnes, mainly driven by stronger buying from India ahead of Diwali, as well as continued strong demand from the Sub-Saharan Africa region.
Meanwhile, Malaysia’s palm oil stocks continued to increase in July, reaching 2.62 million tonnes.
“However, the stock build-up in Malaysia is not a major concern, as strong biodiesel demand and front-loading of exports in Indonesia have kept Indonesian palm oil stocks relatively low.
“The price rally following Malaysian Palm Oil Board’s release of its supply and demand data on Aug 10 further reinforced the view that current palm oil stock levels are not excessive, although overall supply remains comfortable for the time being,” MPOC said.
It said the global vegetable oil market continued to be supported by biofuel demand and geopolitical uncertainty in August, with Malaysian CPO prices leading gains at 3.9 per cent, compared with increases of 2.7 per cent for sunflower oil and 1.1 per cent for soybean oil in Argentina.
Meanwhile, rapeseed oil prices in Europe declined marginally by 0.8 per cent.
According to MPOC, Malaysia’s palm oil production typically peaks in September or October before declining in the fourth quarter.
It said production growth in the first seven months of 2026 was largely due to an improvement in the oil extraction rate (OER) of fresh fruit bunches.
“Malaysia’s OER from January to May 2026 was significantly above the 10-year average, supported by favourable rainfall conditions six months earlier. However, OER fell below the average in June and July and is projected to remain below it for the rest of the year,” it added.
-- BERNAMA