Palm Oil Prices Firm Amid Rising Inventories and El Niño Fears

Crude palm oil (CPO) prices are holding firm despite rising Malaysian inventories as the market looks beyond near-term supply to the risk of tighter conditions in 2027.

The strengthening El Niño conditions, Indonesia's B50 biodiesel mandate, and disruptions to competing vegetable oils have prompted analysts to raise their price forecasts.

SD Guthrie expects CPO to trade between RM4,600 and RM5,000 per tonne for the rest of the year and reach as high as RM5,200 per tonne in the first quarter of 2027 if El Niño conditions develop.

CIMB Securities has raised its average CPO price forecast for 2026 and 2027 by RM50 per tonne to RM4,450 and RM4,550 respectively, citing geopolitical risks, strengthening El Niño weather conditions, and higher Indonesian biodiesel demand.