Malaysian Crude Palm Oil Prices Expected to Hold Firm Amid Supply Concerns

Crude palm oil (MSM) prices are projected to remain strong in July, trading within the RM4,400 to RM4,650 per ton range. This forecast is driven by expectations of a tightening global supply, especially from Indonesia, and the potential impact of the El Niño phenomenon in the latter half of the year. The Malaysian Palm Oil Council (MPOC) anticipates these factors will support price stability.

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The decrease was partly due to the oil palm trees entering a temporary rest phase after recording higher-than-usual production between October 2025 and March 2026.

In May 2026, Malaysia's palm oil production saw a month-on-month decline of 6.9%, reaching 1.51 million tons. This decrease is attributed partly to the natural cycle of palm trees entering a temporary resting phase after a period of higher-than-usual output between October 2025 and March 2026. Additionally, two public holidays in May compared to none in April reduced harvesting days, further impacting production figures.

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Although monthly exports decreased, the cumulative export volume for the period of January to May 2026 increased by 783,000 tons or 13.8 percent compared to the same period last year.

Despite a month-on-month decrease in exports for May, the cumulative export volume from January to May 2026 increased by 13.8% compared to the same period last year, totaling 783,000 tons. Significant growth was recorded in exports to India, Kenya, and Vietnam, which collectively accounted for an additional 749,000 tons. Markets in Sub-Saharan Africa and ASEAN continue to be major drivers of Malaysian palm oil export growth, contributing 36% of total exports in the first five months of 2026.

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The largest increase was recorded in the Indian, Kenyan, and Vietnamese markets, which collectively contributed an additional 749,000 tons of exports.

Globally, U.S. soybean oil and rapeseed oil led price increases in the first half of 2026. However, Malaysian palm oil prices saw only moderate increases, around 8% to 10%. The sustained high price premium for U.S. soybean oil has affected its export competitiveness, with imports expected to increasingly rely on South American supplies if the trend continues. Indonesia's biodiesel mandate is also expected to tighten its exportable palm oil supply in the coming months.

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Markets in the Sub-Saharan Africa and ASEAN regions continue to emerge as the main drivers of Malaysian palm oil export growth.