CPO prices expected to stabilise in long term

With CPO prices falling to their lowest level in almost 11 months, further declines were expected amid lower global vegetable oil demand, the report said.

According to Malaysian Palm Oil Board (MPOB) data, CPO prices reached MYR3,968 (US$936)/tonne in May, a 26% drop from the one-year high of MYR5,333.50 (US$1,258) recorded in early December 2024.

At the time of the report, traders remained cautious, with the July 2025 futures contract at MYR3,801.64 (US$896)/tonne, The Starwrote.

TA Securities Holdings research senior manager Angeline Chin was quoted as saying she expected CPO prices to trend lower in the near term, driven by several downside risks, including a slowdown in vegetable oil demand.

“At the same time, palm oil is entering its high production season, which is likely to lead to rising stock levels and further pressure on prices,” she added.

According to Chin, competing oils are also putting downward pressure on CPO prices, as ongoing trade tensions continue to dampen soyabean export prospects.

Meanwhile, an influx of South American soyabeans, particularly from Brazil, was easing global supply concerns, The Star wrote.

In addition, the US Department of Agriculture (USDA)’s latest crop progress report showed US soyabean planting was ahead of both the historical average and market expectations.

Chin said this development reinforced a bearish outlook for soyabean oil, which would put further downward pressure on CPO prices.

“Adding to this, persistently low crude oil prices are making biodiesel mandates less economically viable, reducing discretionary demand for palm oil in the energy segment,” she added.

However, Council of Palm Oil Producing Countries (CPOPC) deputy secretary-general Nageeb Wahab was more optimistic, saying he expected prices to range between MYR3,800-4,200 (US$896-900)/tonne.

“The current downtrend is due to a stockpile build-up as a result of current peak production, which I believe will taper off after June this year,” he said.

Although tariff uncertainties could impact prices, Wahab said he expected prices to stabilise in the long term.

“The trade war between the USA and China may, in a way, create more demand for palm oil, as China will need replacement for its soyabean oil imports from the USA.”

Tags: prices, Vegetable Oil, Crude palm oil, CPO, demand