High January stock levels to cap CPO prices
11/02/2026 (The Star), Kuala Lumpur - The trajectory of crude palm oil (CPO) prices could depend on production levels in Malaysia and Indonesia as well as demand from price sensitive markets like India and China.
Speakers at the Palm & Lauric Oils Price Outlook Conference and Exhibition 2026 (POC2026) said weaker prices of vegetable oils like soyoil could negatively impact demand for CPO in major destination markets like India and China.
Successful harvest and acreage expansion in Brazil and Argentina had led buyers like China and India to stock up with soybeans and at the expense of lower demand for CPO.
China’s high stock levels of soybeans has led it to sell soyoil to India at competitive prices, something speakers at POC2026 said explained the fall in imports of CPO to India in 2025.
The high stock levels in palm oil in January are also capping the price outlook.
“The prospects for CPO prices are dependent on local stock levels falling back to about two million tonnes in February, which they likely will, and countries like Argentina and Brazil up their biodiesel mandates and use up their soyoil stocks,” said Satya Varqa, managing editor at Fastmarkets.
That could help narrow any price difference between the oils and help revive buying interest in CPO, he added.
Varqa expects CPO prices to average about RM4,100 till April, after which pricing pressure could build as production goes to upcycle unless demand picks up, especially from India.
United Plantations Bhd
vice-chairman and chief executive director Datuk Carl Bek-Nielsen had forecast CPO prices to average between RM3,900 and RM4,300 a tonne in 2026, subject to good weather and an exchange rate of the ringgit at about 3.90 to the US dollar.
Some 70% of Malaysian palm production is exported, so the ringgit exchange rate plays a crucial role in export competitiveness.
Bek-Nielsen said the Indonesian government’s move to fine plantation companies and take over lands planted illegally in forest reserves could have a substantial impact on production levels there, which could help support CPO prices.
The move by Jakarta is leading planters there to scale back on acreage upkeep including spending on fertilisers, which is likely to impact production levels with a lag.
“If Indonesia’s production was to decline by just 4%, that equates to about two million tonnes.
“We all know that if fertilisers are withdrawn, you can easily see a 30% to 40% decline in yields,” he said at the premier event in the global edible oils sector.
The amount of land that could be confiscated is also uncertain and how it will be managed is another question that could impact Indonesia’s production levels this year.
The country produced about 51 million tonnes of CPO last year while Malaysia’s production hit 20.2 million tonnes, helped by availability of adequate labour force, especially foreign workers.
Varqa estimates Indonesia’s CPO production level could hit about 49 million tonnes this year.
Indonesia’s biodiesel mandate is another factor to look out for. The country’s decision to retain its B40 blend mandate instead of B50 in 2026 was negative to the price outlook for CPO.
The latest report noted the B50 mandate will be road-tested up to June of this year and then implemented later.
Speakers added America’s biofuels policy for 2026, which is tied to the Renewable Fuel Standard, which sets annual blending quotas for renewable fuels, is another factor that could impact prices of edible oils on global markets. The policy is due in March.