Kuala lumpur: Crude palm oil (CPO) prices are anticipated to range between RM4,400 and RM4,650 per tonne in July, driven by a tightening supply outlook in Indonesia and the increasing risk of El Nino, as stated by the Malaysian Palm Oil Council (MPOC).

According to BERNAMA News Agency, MPOC noted that while oil palm plantations in Malaysia and Indonesia have not yet been impacted as of June, there is a growing possibility of a stronger El Nino developing from July or August. MPOC explained that a strong El Nino could lead to reduced rainfall and drier conditions across Southeast Asia, Australia, and India. However, the effect on palm oil yields and production would only become noticeable after a delay of nine to 12 months.

The MPOC reported a 6.9 percent month-on-month decline in Malaysia's palm oil production, reaching 1.51 million tonnes in May. The decrease was partly attributed to oil palm trees temporarily entering a resting phase following higher-than-usual production between October 2025 and March 2026. Additionally, May had two public holidays compared to none in April, resulting in fewer harvesting days.

MPOC also highlighted that the decrease in exports in May was largely expected, due to slower purchasing activity in March and April amid heightened price volatility. This was anticipated to result in lower shipments in May and June. Despite the monthly decline, cumulative exports from January to May 2026 increased by 783,000 tonnes or 13.8 percent. The largest increases were observed in exports to India, Kenya, and Vietnam, which collectively rose by 749,000 tonnes.

Further, the Sub-Saharan Africa and ASEAN regions are becoming significant growth markets for Malaysian palm oil. In the first five months of 2026, these regions accounted for 36 percent of Malaysia's total palm oil exports, compared with 25 percent in 2022.