Palm oil output may moderate after seasonal peak, elevated stockpile caps price upside — analysts
11/11/2025 (The Edge Malaysia), Kuala Lumpur - Palm oil output will likely moderate after the seasonal peak though an elevated stockpile will cap the upside to current strong prices in the coming months.
While crude palm oil (CPO) has eased off this year’s high, prices are expected to stay firm above RM4,000 per tonne in the near term, as demand will be supported by Indonesia’s upcoming biodiesel mandate, analysts said on Tuesday in reaction to the latest inventory data.
“With palm oil inventories expected to ease in November and December amid seasonally lower production, we anticipate CPO prices to stay firm,” Apex Securities said. “We expect prices to remain resilient through 2026.”
Indonesia, the world’s largest palm oil producer, is planning to roll out B50 biofuel mandate that requires a 50:50 mix of palm-based methyl ester and petroleum diesel.
Prices of the edible oil used in everything from chocolate to diesel have declined nearly 10% from this year’s peak of RM4,603 per tonne. The benchmark three-month palm oil futures were last trading at RM4,151 on Bursa Malaysia Derivatives.
Palm oil production is typically the strongest in September or October. Data out on Monday showed that inventory in Malaysia, the world's second-biggest palm oil producer, swelled for an eighth consecutive month to a 6½-year high by the end of October.
Recovering output and improving global oilseed supplies would mean prices may “gradually normalise” in the second quarter of 2026 onwards, said BIMB Securities. The peak harvesting season for soybean, the key substitute of palm oil, could also pressure prices, the research house noted.
July-Sept earnings
In terms of earnings for the recently ended quarter, plantation companies could see improvement on both quarter-on-quarter and year-on-year basis, driven by stronger average selling prices and output, RHB Research said.
However, four companies, including Johor Plantations Group Bhd (KL:JPG) and Ta Ann Holdings Bhd (KL:TAANN), could report weaker-than-expected results based on estimated production and prices, the research house flagged.
Kuala Lumpur Kepong Bhd (KL:KLK) and IOI Corp Bhd (KL:IOICORP) are among those likely to post results that are largely in line with expectations, RHB Research said.