CPO Prices to Stay Firm Amid El Nino-Driven Supply Disruptions
Crude palm oil (CPO) prices are expected to remain firm in Malaysia despite rising inventories and weak exports, according to research houses. BIMB Securities maintains its CPO price forecasts at 4,400 ringgit (1,082 U.S. dollars) per ton for 2026 and 4,500 ringgit per ton for 2027 with an upside bias.
The research house cites stronger vegetable oil demand from expanding global biodiesel mandates, a potentially tighter global palm oil supply-demand balance, and the impact of El Nino on regional output as key supports for prices. BIMB Securities also notes that inventories are expected to remain around 2.82 million tons in the coming month amid the seasonal peak-crop cycle before easing somewhat in the fourth quarter.
However, MBSB Research warns that near-term downside risks remain largely demand-driven, with continued weak exports potentially pushing inventories towards the psychological 3-million-ton level and capping price gains. Maybank Investment Bank also notes that the impact of El Nino on palm oil production typically lags and may only become evident in 2027.
The eight-month 2026 average CPO price stood at 4,413 ringgit per ton, broadly in line with BIMB Securities' full-year forecast. MBSB Research also expects CPO prices to remain firm in September, with an average price of 4,514 ringgit per ton, up 0.6 percent month-on-month.