Kuala Lumpur: Malaysia’s palm oil industry is expected to remain bullish in the near term, backed by firmer exports and manageable inventories, according to Fastmarkets Palm Oil Analytics senior analyst Sathia Varqa, reports The Malaysian Reserve.
He said crude palm oil (CPO) prices are likely to stay elevated, ranging between RM4,200 and RM4,500 per tonne, supported by global trade disruptions and uncertainty over U.S. biofuel policy.
“Import tariffs and shifting trade barriers in major economies have tightened edible oil supplies, raising risk premiums and spurring speculative buying, which has reinforced palm oil’s price momentum,” Sathia told Bernama.
He pointed to China’s anti-dumping duties on Canadian canola as an example. “The move drove rapeseed oil futures higher in China, and the rally quickly spilled into palm oil as traders adjusted across the vegetable oil market,” he said.
In the U.S., changes to biofuel policy under the 45Z programme have strengthened soybean oil prices by favouring domestic feedstock. “Since soybean oil is the main feedstock for biodiesel, the price rally spilled over into palm oil, lifting CPO prices as well,” Sathia explained.
The analyst said Malaysia’s export outlook is bright, with stronger shipments to India ahead of upcoming festivals. “Seasonal restocking will provide solid support for exports in the coming months,” he said.
On stocks, he noted that inventories slightly above two million tonnes reflect short-term supply-demand trends rather than oversupply. “Production growth is stagnant as planted areas remain unchanged at five million hectares since 2012. We expect production to peak soon before easing in the fourth quarter of 2025,” he added.
According to Malaysian Palm Oil Board (MPOB) data, national inventories rose for a fifth straight month in July, reaching 2.11 million tonnes—the highest in nearly two years—up 4% from June.
Biofuel: Malaysia’s palm oil market set to stay strong amid high prices and festive demand
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