MPOB maintains palm oil price forecast at RM4,000-RM4,300 per ton

The Malaysian Palm Oil Board (MPOB) has maintained its forecast for crude palm oil (CPO) prices, expecting them to range between RM4,000 and RM4,300 per ton for the year.

This price stability is attributed to a confluence of factors, including global geopolitical tensions, persistent supply constraints, and potential production disruptions stemming from weather patterns and the biodiesel policies of key producing nations. MPOB Director-General Datuk Dr. Ahmad Parveez Ghulam Kadir noted that current palm oil prices are holding strong between RM4,000 and RM4,500 per ton, with this momentum anticipated to continue through year-end.

Geopolitical events, particularly tensions in the Strait of Hormuz, directly impact global crude oil prices, which in turn supports vegetable oil prices, including palm oil. "When petroleum prices increase, the prices of palm oil and other vegetable oils also rise due to the close relationship in the global commodity market," Dr. Ahmad Parveez explained.

Supply disruptions are also influenced by weather phenomena like El Niño, which can affect pollination and long-term palm oil fruit production. He recalled that during the major El Niño events of 2015 and 2016, national palm oil production fell by approximately 18%. Furthermore, Indonesia's biodiesel policy, which is expected to increase to B50, could reduce global export supply by about three million tons annually, further supporting high palm oil prices.

Regarding the EU's Deforestation-Free Regulations (EUDR), MPOB is actively preparing the industry. Large plantation companies are largely ready, with traceability systems in place. Efforts are also being strengthened to assist smallholders, who show high readiness levels in Peninsular Malaysia (over 80%) and Sabah (around 60%), though Sarawak faces challenges due to customary land ownership issues. MPOB has introduced systems like GeoSawit and Sawit Intelligent Compliance (SIC) to ensure supply chain compliance with European market requirements. Malaysia currently mandates B15 biodiesel, with higher blends contingent on infrastructure upgrades.