Asian palm oil prices hit three-month high on stronger rival oils, lower production

Asian crude palm oil prices climbed to their highest level in more than three months on Jan. 28, supported by firmer rival vegetable oils, expectations of lower output in key producing countries, and improving export prospects, market sources told Platts.

Platts, part of S&P Global Energy, assessed crude palm oil FOB Indonesia for February loading at $1,115/mt on Jan. 28, up $5/mt from the previous day and 4.45% higher month over month. The price was last assessed above this level on Oct. 21, 2025, at $1,122.5/mt.

The price increase dampened immediate buying interest as buyers adopted a wait-and-see approach.

“The purchasing interest has dropped amid higher levels,” an India-based trader said. “However, Indian buyers are still undercovered for February and March, so demand is expected to re-emerge when prices decline from current levels.”

Additionally, the spread between February and March FOB Indonesia crude palm oil loading prices widened to $30/mt, with the March loading price assessed at $1,145/mt.

“Indonesia’s price surged on anticipation of an increasing tax in March,” an Indonesia-based exporter said.

Platts assessed crude palm oil CFR West Coast India for February shipment at $1,142.50/mt on Jan. 28, up $5/mt day over day and 3.63% higher on the month.

Benchmark third-month crude palm oil futures on the Bursa Malaysia Derivatives exchange rose 0.28% to MR4,272/mt ($1,089.77/mt) at the market close on Jan. 28, reaching a nearly three-month high.

The recent surge in palm oil prices was supported by gains in competing oils, including stronger soybean oil prices and higher Dalian palm olein futures.

“The BMD CPO market is reacting to the elevated Dalian market and soybean oil market on the Chicago Board of Trade, as the US Renewable Volume Obligation policy provided support,” the India-based trader said. “Hence, the palm market is supportive, factoring in the external market.”

Market sources further attributed the price rise to an expected increase in Malaysia’s palm oil production in January and stronger exports during the month.

“Palm side firmness is driven by lower production for both Malaysia and Indonesia, while it seems exports would rise for Ramadhan and Hari Raya, leading to declining stocks month over month,” a second Indonesia-based exporter said.

In Malaysia, the Southern Peninsular Palm Oil Millers Association reported that palm oil production from Jan. 1-20 fell compared to Dec. 1-20, with overall output down 16.06%.

Tags: prices, palm oil