Kuala lumpur: Crude palm oil (CPO) prices are anticipated to range between RM4,400 and RM4,650 per tonne in August, bolstered by Indonesia's B50 biodiesel implementation starting in July, firmer energy markets, and improved biodiesel economics.
According to BERNAMA News Agency, the Malaysian Palm Oil Council (MPOC) highlighted that renewed United States-Iran tensions led to a 30 percent increase in gasoil prices from early to mid-July, making this fuel costlier than palm oil and soybean oil. However, potential price gains may be constrained by softer demand and elevated vegetable oil stocks in major consuming markets.
MPOC also indicated that Malaysia's palm oil supply outlook is favorable in the near term. Data from the Malaysian Palm Oil Board (MPOB) showed stable production in the first half of 2026, with stocks rising to 2.5 million tonnes in June. Malaysia's palm oil production increased by eight percent month-on-month to 1.63 million tonnes in June 2026, reflecting a typical seasonal production upcycle that starts in March. Nonetheless, the June 2026 output was three percent lower compared to June 2025, marking the fourth consecutive month of year-on-year decline.
Exports rose by 6.1 percent month-on-month to 1.20 million tonnes in June 2026, although volumes were four percent below those of June 2025. The weaker performance was attributed to softer oils and fats consumption in key markets such as China and India, amid the ongoing impact of the West Asia conflict.
Meanwhile, MPOC mentioned that global oilseed production is forecast to continue expanding, but growth in the three major oilseeds is expected to slow in the 2026-2027 season. Combined soybean, sunflower seed, and rapeseed output is projected to increase by only 16.5 million tonnes from a year earlier, which is below the average annual increase of 22.7 million tonnes recorded over the past four years.
MPOC noted that global dependence on soybean oil, sunflower oil, and rapeseed oil has increased since 2019 due to tighter exportable palm oil supply from Southeast Asia. Slower oilseed production growth, alongside continued expansion in vegetable oil demand, particularly from the biofuel sector, is anticipated to sustain vegetable oil prices.
Despite these longer-term developments, MPOC observed that near-term vegetable oil demand remains moderate across major importing markets. Vegetable oil stocks in India remain elevated despite a slowdown in imports, indicating weaker consumption amid inflationary pressures. However, restocking ahead of Deepavali could support demand, as India typically imports around 30 percent of its annual vegetable oil requirements between July and September. Palm oil remains the most competitively priced major vegetable oil, positioning it well to benefit from seasonal restocking ahead of Diwali.