The Edge Malaysia (17/06/2025) - KUALA LUMPUR (June 17): The Malaysian Palm Oil Council (MPOC) expects palm oil prices to remain within the RM3,900 to RM4,200 per tonne range in June and July 2025, after a surge in May's palm oil stocks to a 10-year high for that month.

In a statement, the MPOC said while palm oil stocks hit a record 1.77 million tonnes in May, the crude palm oil (CPO) price moving forward will be supported by firm exports, improved price competitiveness against soybean oil and elevated crude oil prices.

“This improvement was largely driven by favourable weather conditions for harvesting,” said the council.

It added, “The rebound was primarily contributed by robust demand from China and India, which collectively accounted for 28% of Malaysia’s total palm oil exports in May,” said the council.

In light of this, coupled with India’s recent cut in import duties, CPO may become more attractive due to a wider duty gap between crude and refined oils, now at 19.25%.

Given that Malaysia primarily exports CPO to India, the MPOC said it stands to benefit from this policy shift. Additionally, palm oil is currently US$83 per tonne cheaper than soybean oil, which could provide Indian buyers with a strong cost incentive.

However, output in June is expected to soften due to fewer harvesting days from national and state-level holidays. Vegetable oil prices have also remained steady during the month, supported by easing US-China trade tensions.

Further price gains may be limited by the rising availability of soft oils as global sunflower seed and rapeseed oil production is projected to grow by 8.1 million tonnes in the upcoming harvest season, while strong soybean production in 2025 is expected to carry over large leftover stock into 2026, according to the statement.

In America, the rally in soybean oil prices was largely driven by US biofuel legislation favouring domestically sourced feedstock and the Trump administration’s proposed biomass-based diesel mandates under the under the Renewable Fuel Standard (RFS), whereby refiners must blend biofuels, or buy
compliance credits known as Renewable Identification Numbers (RINs).  

The council highlighted that downside risks in July seem minimal as stocks are expected to stay around two million tonnes, supported by strong exports and easing production after peak output in April and May.

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