MPOC sees near-term palm oil price above RM4,300 per tonne on supply slowdown

Palm oil prices are expected to hold above RM4,300 ringgit per metric tonne (US$1,018) in the near term on a supply slowdown and a cut in soybean availability amid demand for biodiesel, the Malaysian Palm Oil Council (MPOC) said on Tuesday.

Crude palm oil prices were at RM4,607 per metric tonne on Tuesday, as of 0600 GMT.

MPOC said the price’s sustainability at its estimated level will depend on palm oil’s competitiveness against soybean oil in the export market. Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.

The US Department of Agriculture projects that more than half of the country’s soybean production will be used domestically for biodiesel in 2026, MPOC said.

“US soybean oil exports are forecast to drop from 1.15 million tonnes in 2025 to just 310,000 tonnes in 2026.”

Brazil’s soybean oil exports may also struggle to expand as it raised its biodiesel blend to 15% from 14%.

“As a result, the global market will increasingly rely on Argentine supplies to cover the shortfall. This tightening in export availability is likely to support vegetable oil prices,” it said.

Meanwhile, Indonesia’s plans to raise its biodiesel mandate to 50% in 2026, if implemented, will further tighten palm oil supplies as its requirement will jump to 16 million tonnes from 13 million tonnes in 2025, it added.

MPOC doesn’t expect a major build-up in September and October palm oil stocks, adding that any downturn in production in Peninsular Malaysia is expected to cap national production growth for the rest of the year.

Demand from India is expected to remain firm as importers stock up ahead of the Diwali festival, while demand from Africa is also projected to remain steady.