Limited Fluctuations Expected in Malaysian Palm Oil Prices in January

24-Dec-2025 09:33 PM

Singapore. Industry analysts believe that a better balance between supply and demand for Malaysian palm oil is likely to prevail during January 2026, leading to limited price fluctuations and a largely stable market. The export duty on crude palm oil (CPO) in Malaysia has been reduced from 10 percent in December to 9.5 percent for January.

According to the Malaysian Palm Oil Board (MPOB), crude palm oil futures prices are expected to range between 3800 and 4100 ringgit per ton. The Malaysian Palm Oil Council (MPOC) had previously expressed a similar forecast.

The board stated that palm oil production in Malaysia typically declines during the first quarter of the new year, while demand is expected to increase due to the Lunar New Year in China and Vietnam, and the Ramadan festival in Muslim countries.

This could provide some support to prices. Increased demand could reduce palm oil stocks in Malaysia, easing pressure on the industry.

However, given the softening of global market prices for energy sources, particularly petroleum, and the ample availability of oilseeds in the international market, a strong surge in palm oil prices seems unlikely. If the benchmark palm oil futures price in Malaysia rises too high, importers may shift their focus to soybean oil.

A sustained period of strong price increases in palm oil is doubtful, as this could negatively impact demand. Heavy rainfall in Indonesia could significantly improve the condition of palm plantations in the coming months.

The board projected that crude palm oil production in Malaysia will decline slightly to 19.7 million tons in 2026, while total exports of palm oil products from Malaysia are expected to improve to 16.2 million tons.