KUALA LUMPUR (Oct 22): Palm oil prices will stay firm above RM4,600 per tonne next month on stronger exports and seasonal output decline, said a Malaysian industry council.
Sustained biodiesel consumption and India's recent reduction in vegetable oil import duties are expected to support demand for Malaysian palm oil over the coming months, the Malaysian Palm Oil Council, or MPOC, said in a statement.
“Seasonal decline in production is expected to reduce the current stock levels” with Malaysian palm oil inventories projected to begin falling from November 2026 through February 2027, providing further support to palm oil prices in the final quarter of 2026, the council said.
Stockpile of the edible oil used in everything from infant formula to soap expanded nearly 25% to its largest on record in September. Output in the world’s largest producer after Indonesia surged 16%.
Production typically begins picking up in March-April and peaks in September-November.
This year, production likely peaked in September and is expected to decline seasonally over the next five months, the council noted.
Exports, meanwhile, contracted 12% amid competition from the world’s top grower as Indonesian exporters accelerated shipments ahead of new regulations and a higher export duty scheduled for October.
Limited vessel availability in the Strait of Malacca was also to blame for the decline, though “the weakness in September exports is likely to be temporary” as shipments are expected to rise “significantly” in October-December with improving vessel availability, the MPOC said.
Prices of palm oil are off highs but are still up by 18% year-to-date, amid a global push for a higher blend of palm-based methyl ester in biodiesel to cushion a spike in petroleum prices from the Iran War. Palm oil futures was RM4,776 per tonne on Bursa Malaysia Derivatives on Thursday.
The elevated energy prices remain supportive for the vegetable oil market and biodiesel blending globally, particularly in Indonesia, the council said, noting that Indonesia’s palm oil consumption for biodiesel reached a record monthly high in August.