Crude palm oil prices to remain above $1,154 per ton for rest of 2026, MPOC says

The Malaysian Palm Oil Council forecasts crude palm oil prices to stay above $1,154 per metric ton through the remainder of 2026. This projection is backed by weather uncertainties and advantageous energy markets. The council warns that potential downside risks include falling energy prices and the accumulation of excess stock, especially since palm oil production usually peaks seasonally in September or October.

Malaysian palm oil exports are anticipated to stay steady at about 16 million tons in 2027, highlighting Malaysia's significant role in supplying palm oil to global consumers. The high stock levels currently observed are expected to be short-term, as production and stock levels in Malaysia and Indonesia are projected to decrease in the coming months.

In August, inventories reached an eight-month high due to increased production and reduced exports, according to data from the Malaysian Palm Oil Board. Dry weather related to El Niño has grown more intense in Malaysia and Indonesia since early August, raising concerns about its possible impact on palm oil production within the next six to nine months.

Rainfall in Indonesia was approximately 20% below average in July and 60% below average in August, while Malaysia experienced drier conditions with rainfall about 30% below average in August. Regarding energy markets, MPOC noted that biofuel blending margins improved due to the shutdown of Saudi Arabia's East-West pipeline facilities and shipping disruptions in the Strait of Hormuz and the Bab al-Mandab Strait.