CPO prices to stay above RM4,600 in November as output dips, biodiesel demand holds

KUALA LUMPUR: Crude palm oil prices are expected to remain firm above RM4,600 per tonne in November, supported by seasonal production declines, resilient biodiesel demand and tighter global supplies of competing vegetable oils, the Malaysian Palm Oil Council (MPOC) said.

The council said India's recent reduction in vegetable oil import duties was also expected to support a recovery in palm oil imports in the coming months, while lower availability of sunflower and soybean oils could strengthen demand for palm oil.

However, the outlook remains subject to downside risks, including easing energy prices and weaker-than-expected global vegetable oil consumption for food amid persistent inflationary and economic pressures, MPOC said in a statement.

Malaysian palm oil production rose 16.4 per cent to 2.11 million tonnes in September, supported by higher fresh fruit bunch (FFB) output and improved oil extraction rates (OER).

Production is believed to have peaked in September and is expected to decline seasonally over the next five months.

Meanwhile, cumulative palm oil exports increased by 4.3 per cent year-on-year in the first 9 months of 2026, despite a 12.1 per cent decline to 1.12 million tonnes in September.

MPOC attributed the weaker monthly performance mainly to limited vessel availability in the Strait of Malacca and increased competition from Indonesia.

Indonesian exporters accelerated shipments ahead of new export regulations announced in June 2026 and a higher export duty scheduled for October following an increase in the reference price.

However, the September weakness is expected to be temporary, with Malaysian shipments projected to rise significantly between October and December, as vessel availability improves and global supplies of softer oils tighten.

The easing of palm oil prices from their September highs could also encourage global buyers to secure forward shipments at more favourable prices, MPOC said.

Ongoing logistical disruptions in the Black Sea region continue to constrain crushing activity, limiting sunflower oil availability in the global market over the next few months unless a safe shipping corridor is established. This comes despite expectations of record global sunflowerseed production of 65.3 million tonnes in 2027, with most of the increase projected to come from the Black Sea region, it said.

Soybean oil availability from South America is also expected to tighten as the region enters its soybean planting season between October and December.

MPOC said that against this backdrop, India is expected to increase its reliance on palm oil imports to meet vegetable oil demand and replenish stocks following the Diwali celebrations in November.

A similar trend could emerge in China, where reduced soybean supplies from Brazil may encourage greater palm oil consumption.

On the supply side, seasonal production declines are expected to draw down Malaysian palm oil inventories, which MPOC projects will trend lower from November 2026 through February 2027.

The council anticipated stock reduction should provide an additional price-supportive factor in the final quarter of 2026.

Biodiesel demand remains another key pillar of the market, particularly as elevated energy prices continue to favour biodiesel blending globally.

Data from the Indonesian Palm Oil Association (GAPKI) showed that Indonesia's palm oil consumption for biodiesel reached a record monthly high of 1.35 million tonnes in August 2026, 75 per cent higher than consumption for food applications.

The figure translates into an annualised palm oil requirement of about 16 million tonnes, suggesting Indonesia is progressing towards full implementation of its B50 biodiesel blending programme.