Malaysian CPO prices unlikely to benefit from US soybean’s fall amid US-China trade war — analysts
11/04/2025 (The Edge Malaysia), Kuala Lumpur - Local crude palm oil (CPO) prices are unlikely to benefit from the fall of US soybeans, which will be significantly impacted by the trade war between US and China, according to analysts.
China is the biggest consumer of US soybean exports, which totalled US$27 billion (RM119.8 billion). American soybeans now face a 94% tariff in China.
According to TA Securities’ note on the sector, palm oil is unlikely to see increased demand from China amid the US-China trade spat because it can’t replace soybeans in animal feed. It has a different nutritional value and function.
It said the situation instead might reduce palm oil demand, especially if countries like India start buying more US soybeans, as part of their trade deals with the US. TA Securities expects CPO prices to average at RM3,800 a tonne for 2025.
Since January 2025, CPO prices have dropped 6.6% to RM4,500 per metric tonne, averaging RM4,710 for the year.
CPO futures have hit a six-month low since October 2024, pressured by falling soybean oil and crude oil prices after new US tariff announcements.
CIMB Securities, which is short-term negative on CPO prices, noted that low crude oil prices make biodiesel less viable, exerting downward pressure on CPO prices. Improved palm oil supply in the second quarter of 2025 due to better weather and seasonal factors is also a factor.
CIMB said it expects CPO prices to average RM4,200 a tonne in 2025, but expects second quarter prices to be weaker versus the first quarter, owing to rising supply.
Malaysia’s palm oil stockpiles increased in March, for the first time after five months of decline. This was due to higher production and imports, along with weaker exports.