Malaysia Palm Oil Prices to Remain Elevated Amid Supply Disruptions

Malaysia's crude palm oil (CPO) prices are expected to remain elevated through 2026 and into early 2027, driven by stronger biodiesel demand and the risk of an El Nino-driven supply disruption. BMI Country Risk and Industry Research has raised its 2026 average price forecast for front-month Bursa Malaysia-listed CPO futures to 4,453 ringgit (1,103 U.S. dollars) per ton.

The narrowing global production surplus is a key factor in the price increase, as consumption growth outpaces supply. Global palm oil production is forecast to reach 81.4 million tons in the 2026/27 season, a marginal decline of just 20,000 tons from 2025/26.

The Malaysian Palm Oil Council (MPOC) also expects CPO prices to remain firm above 4,600 ringgit per ton in September, supported by tightening supply fundamentals and continued geopolitical disruptions to global trade flows. However, downside risks remain, including an easing of Black Sea logistical bottlenecks and the arrival of new-crop sunflower oil supplies.