Kuala Lumpur: The Malaysian Palm Oil Board (MPOB) has projected a positive outlook for the palm oil industry in 2025, with strong crude palm oil (CPO) prices expected to continue. Tight global supplies, partly due to Indonesia’s B40 biodiesel mandate, are likely to support the firm pricing, according to MPOB Director General Datuk Dr Ahmad Parveez Ghulam Kadir.
Speaking at the Palm Oil Economic Review & Outlook Seminar (R&O) 2025, Ahmad Parveez said CPO prices are expected to average between RM4,000 and RM4,300 per tonne in 2025. This follows an average price of RM4,179.50 per tonne in 2024, which marked an increase from RM3,809.50 per tonne in 2023. December 2024 saw the highest monthly average price of RM5,119.50 per tonne, with a peak daily price of RM5,333.50 recorded on December 6.
Indonesia’s B40 biodiesel mandate, initially scheduled for January 2025, has been delayed due to infrastructure and technical adjustments. Once implemented, the mandate is expected to significantly reduce the amount of palm oil available for export, further tightening global supply.
In addition, increased biodiesel demand in the United States and shifts in crop production from soybeans to corn are expected to strain the global supply of vegetable oils.
MPOB forecasts a slight increase in Malaysia’s CPO production, rising from 19.34 million tonnes in 2024 to 19.5 million tonnes in 2025. Exports are also expected to grow from 16.9 million tonnes to 17.3 million tonnes. Palm oil stocks, however, are projected to decline from 1.7 million tonnes to approximately 1.6 million tonnes, with inventories staying below two million tonnes throughout the year.
MPOB emphasized its dedication to balancing environmental, economic, and social responsibilities in the palm oil industry. “The ministry and related agencies will continue to work closely to address environmental concerns while promoting a sustainable and stable future for the industry,” said Ahmad Parveez. As of Tuesday, the benchmark third-month delivery price for CPO was trading at RM4,496, reflecting confidence in the market’s outlook.
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