CPO price expected to improve in the coming months

06-May-2025 04:59 PM

Kuala Lumpur. The price of crude palm oil (CPO) is expected to rise to 4000 ringgit per tonne by next year. According to a leading market research firm, during the first quarter of 2025 (January to March), the price of CPO remained significantly higher than that of soybean oil, which negatively impacted its export performance.

At one point, it reached a high of 4024 ringgit per tonne before starting to decline. As prices fell, the premium of CPO over soybean oil also diminished.

While the demand for biodiesel has weakened in several countries, including the United States, buyers are showing increased activity in purchasing CPO to build inventories.

The research firm suggests that supply and availability are likely to remain challenging throughout 2025, with a sharp decline expected in palm oil stock levels compared to 2024. As a result, prices are projected to stay firm.

Benchmark futures prices of CPO may range between 4000 to 4500 ringgit per tonne. The firm forecasts the average price of CPO to be around 4200 ringgit per tonne in 2025 and around 4000 ringgit per tonne in 2026. This outlook points to better and more consistent income for the plantation sector.

Consumption of palm oil for food is expected to account for 70 percent of total use, with 23 percent going toward biodiesel production and the remaining 7 percent used for other purposes.

This consumption pattern is likely to support stable demand and elevated prices. In Indonesia, the world's largest producer and exporter, efforts are being intensified to increase domestic use of CPO.

The government is promoting the refining industry and boosting the use of palm oil for biodiesel. Additionally, there is a growing focus on increasing exports of refined palm oil or palmolein rather than crude palm oil.