CPO prices seen range-bound at RM4,000- RM4,600/t in first half 2026
25/11/2025 (New Straits Times), Kuala Lumpur - Crude palm oil (CPO) prices are expected to remain range-bound in the near term, trading between RM4,000 and RM4,600 per tonne in the first half of 2026, according to CIMB Securities Sdn Bhd.
The firm said insights from the MPOB International Palm Oil Congress and Exhibition (PIPOC) 2025 indicate that short-term price swings may persist, but clear policies - particularly on biodiesel - are crucial for a sustained recovery.
Prices are likely to remain volatile within RM4,000–4,300 per tonne without decisive policy signals, influenced by inventory levels, weather and short-term trade flows.
CIMB Securities' average CPO price forecasts are RM4,330 per tonne for 2025 and RM4,200 per tonne for 2026.
The firm said CPO price weakness is largely due to high production levels across Malaysia and Indonesia and the absence of fresh policy catalysts.
"While fundamentals matter in the long run, recent price behaviour has been driven largely by shifting expectations around Indonesia's biodiesel mandates (B40–B50) and the US Environmental Protection Agency (EPA), where each announcement, delay, or setback ignited short-term rallies and subsequent collapses," it added.
It said high stock levels and an extended production peak are also weighing on the market, leaving sentiment flat.
However, a cautiously constructive outlook points to a potential recovery to RM4,300–4,400 per tonne by the first quarter next year if export demand improves and palm oil becomes more competitive against soybean oil, though sustained upside will still require clear policy catalysts.
CIMB Securities said Malaysia's long-term competitiveness in palm oil depends on accelerated replanting and estate turnaround, especially among smallholders facing ageing palms, limited capital and weak access to technology.
The national replanting rate currently stands at about 1.5 per cent, far below the 4.0 per cent required, leaving a backlog of roughly 650,000 hectares of palms over 25 years old, which depresses yields and raises production costs.
"MPOB simulations show that replanting 200,000–228,000 ha annually could eliminate the backlog within four to five years and lift national yields from 17.9 tonnes per ha to 20.8 tonnes per ha by 2035," it added.
CIMB Securities said to ensure effective yield recovery, replanting must be paired with proper estate management, including consistent fertiliser application, drainage improvements, mechanisation, digital traceability, and better labour conditions.
Coordinated financing and structured replanting programmes are seen as critical for smallholders to reduce costs, increase income, and build a more resilient palm oil sector.