MPOC says that palm oil is expected to trade between 4,200 and 4500 ringgits in the coming weeks.
The Malaysian Palm Oil Council stated on Monday that palm oil prices are expected to fluctuate between 4,200 and 4,500 Ringgit ($998 and $1,069) per metric tonne in the coming weeks due to a tight supply of vegetable oil and weak demand from key markets.
The palm oil futures traded on the Malaysian Stock Exchange ended the morning at 4,464 Ringgit, close to the upper end of the range.
The council stated that consumption of four major vegetable oil - palm, sunflower, soybean, and rapeseed - is expected to exceed production growth in 2026, leading to a small supply deficit.
The tightening of global soybean oil supply is predicted to be due to a stronger soybean oil demand, driven by biodiesel mandates in the United States, and Brazil. Indonesia's palm oil exports could also fall short of potential if biodiesel is mandated to B50. The MPOC stated that these factors will likely keep the vegetable oil price supported for the rest of 2025.
The council noted that exports were virtually unchanged in August from July. The council said that exports to Asia-Pacific and Sub-Saharan Africa as well as the European Union, North Africa, and the Middle East increased month-on-month, whereas exports to Americas and South Asia showed marginal declines.
The report also stated that the growth in global soybean production is expected to drop sharply in 2025/26 to just 2.5 million metric tonnes, down from 27 million metric ton increases in 2024/25 as U.S. farmers and Argentinians shift their acreage towards more profitable crops.
It said that "although global soybean production is still expected to exceed consumption by 2026, stock accumulation will slow down significantly in comparison with the last three years. This should reduce downward pressure on soybean price."
MPOC said that stocks of palm oil are expected to reach their peak in October, and then begin to decline when production enters its low season in November.
(source: Reuters)
