Palm Oil Prices to Remain Elevated Amid Favorable Weather Conditions
Palm oil production is expected to remain strong over the next two to three months as the industry enters its peak-crop period, according to BIMB Research.
The research firm notes that emerging dry conditions are not expected to materially affect output in the second half of 2026 due to the normal lag between rainfall deficits and oil palm yields.
However, the risk of lower regional production is increasing for 2027, particularly if a strong El Niño persists through the end of 2026. The delayed impact of adverse weather could tighten palm oil supply next year.
In July, Malaysia's crude palm oil (CPO) production rose by 9.4% month on month to 1.79 mln tons, while inventories increased to 2.63 mln tons. High stocks and seasonally stronger production may limit further price gains in the near term.