Kuala lumpur: The Malaysian Palm Oil Council (MPOC) anticipates crude palm oil (CPO) prices to remain supported at RM4,500 per tonne in the near term, backed by stronger biodiesel economics, elevated crude oil prices, and a possible onset of El Ni±o.
According to BERNAMA News Agency, further gains are likely to be capped by softer export demand amid inflation and weaker economic growth in key importing countries, alongside rising stocks as palm oil production gradually enters its seasonal peak. Since the West Asia conflict escalated on February 27, vegetable oil prices have been uneven, with palm oil and United States (US) soybean oil rising 15-16 percent by mid-April, while sunflower oil, rapeseed oil, and Argentine soybean oil recorded only marginal gains of two to five percent.
The MPOC noted that palm oil and US soybean oil have been the primary beneficiaries of pent-up biodiesel policy and demand, underpinned by elevated energy prices. An estimated 1.0-1.5 million tonnes of palm oil in Southeast Asia are expected to be absorbed by stronger domestic demand in the second half of 2026. Malaysia would require an estimated additional 300,000 tonnes per annum under its B15 biodiesel mandate, while Indonesia would need a further 3.0 million tonnes per year to fulfill its B50 mandate if fully implemented, although biodiesel producers may continue at B40, depending on capacity readiness.
On El Ni±o, the council pointed out the potential risk that the natural climate phenomenon will develop, which could provide additional support to the CPO price. Malaysia has experienced reduced rainfall since mid-March, and according to the Malaysian Meteorological Department, these conditions are expected to persist until June this year.
To recap, Malaysia's palm oil stocks fell 16.1 percent to 2.26 million tonnes in March, as exports surged to 1.55 million tonnes against production of 1.37 million tonnes. According to the MPOC, the strong export performance was driven by front-loading ahead of rising shipping costs, alongside softer Indonesian exports following their pre-March rush to ship before the higher levy took effect.
Despite global headwinds, exports in the first quarter of 2026 rose 29.1 percent year-on-year, with shipments improving across all regions, except the Americas. North Africa recorded the strongest growth at 94 percent, followed by South Asia (74 percent), other Europe and Central Asia (47 percent), Asia Pacific (24 percent), and Sub-Saharan Africa (20 percent).