Kuala lumpur: Crude palm oil (CPO) futures on Bursa Malaysia Derivatives closed higher today, supported by expectations of tighter supply amid concerns over a potential decline in Indonesia's output this year, an analyst said. Fastmarkets Palm Oil Analytics senior analyst Dr. Sathia Varqa noted that the outlook for weaker production in Indonesia lifted market sentiment.

According to BERNAMA News Agency, news that Indonesia's CPO output could decline by up to two million tonnes from 2025 levels, due to El Nino-induced dry weather and elevated fertiliser prices linked to the West Asia conflict, likely spurred buying interest on expectations of tighter supply. Indonesia, the world's largest palm oil producer, is expected to face a longer and more severe dry season in 2026 than last year, raising drought risks.

At the close, the May 2026 and June 2026 contracts each rose by RM37 to RM4,405 per tonne and RM4,545 per tonne, respectively, while the July 2026 contract gained RM42 to RM4,578 per tonne. The August 2026 contract advanced RM45 to RM4,604 per tonne, the September 2026 contract climbed RM49 to RM4,621 per tonne, and the October 2026 contract increased RM51 to RM4,629 per tonne.

Trading volume fell to 73,968 lots from 93,387 lots on Tuesday, while open interest declined to 256,779 contracts from 259,686 contracts previously. The physical CPO price for May South increased RM30 to RM4,560 per tonne.