Malaysia: CPO price premium weighs on exports
Malaysia’s palm oil exports could remain under pressure as crude palm oil (CPO) prices trade at a premium to rival edible oils, according to CIMB Securities Sdn Bhd.
The firm said CPO is currently priced US$72 per tonne higher than soybean oil, US$92 above rapeseed oil and US$40 above sunflower oil, eroding its competitiveness in key markets such as the European Union and India.
Malaysian palm oil exports slipped 1.24 per cent month-on-month (MoM) to 476,610 tonnes in the first 10 days of September, mainly due to weaker shipments to these two destinations.
In August, Malaysian palm oil stocks rose 4.2 per cent MoM and 17 per cent year-on-year (YoY) to 2.2 million tonnes, reaching a 20-month high.
CIMB Securities said the stock levels were in line with its estimate and consensus expectations.
Palm oil production increased 2.3 per cent MoM to 1.86 million tonnes while exports dipped 0.3 per cent to 1.33 million tonnes.
A notable driver keeping stocks in check was strong domestic disappearance, which rose 6.2 per cent to 491,000 tonnes, up 29 per cent to-date to 3.1 million tonnes.
This is partially supported by higher biodiesel output, oleochemical demand and used cooking oil exports.
“We project Malaysian palm oil stocks to rise 6.0 per cent MoM to 2.3 million tonnes in September, driven by a projected 5.0 decline in exports and 4.0 per cent decline in domestic disappearance.
“Palm oil production is expected to fall 2.0 per cent MoM, reflecting fewer working days in September following four public holidays compared to one in Auguest,” it said in a note.
CIMB Securities maintained its “Overweight” stance on the plantation sector, citing supportive long-term demand drivers such as Indonesia’s planned upgrade of its biodiesel mandate to B50 by 2026 and US biofuel policies.
Its average CPO price estimate stands at RM4,200 per tonne for 2025, versus RM4,312 per tonne achieved in the first eight months of this year.
Top sector picks include SD Guthrie Bhd (Buy, TP: RM5.15), IOI Corp Bhd (Buy, TP: RM3.93), Ta Ann Holdings Bhd (Hold, TP: RM4.16) and Hap Seng Plantations Holdings Bhd (Buy, TP: RM1.97).
Further development of the grain and oilseed markets of Ukraine and the Black Sea region will be in the spotlight of the BLACK SEA GRAIN. KYIV conference, taking place on April 22–23 in Kyiv. The event will focus on strategic directions for the agricultural sector through 2030, including investments, energy independence, processing, and exports of high-value products.
Join strategic discussions and networking with industry leaders to gain актуальна insights, discover new business opportunities, and build partnerships with key market players.
Read also
Poland Rapeseed Market Enters a Phase of Feedstock Deficit and Rising Competition
UK scientists develop soy traceability tool to combat deforestation
Truce did not calm the markets: Strait of Hormuz is almost blocked, crude oil pric...
Black Sea & Danube: Crop and Export Forecast
USDA analysts left unchanged the forecast of corn exports from Ukraine
Got additional questions?
We will be happy to assist!
Write to us
Our manager will contact you soon