New Straits Times (19/12/2025) - KUALA LUMPUR: Malaysia's palm oil prices are expected to remain range-bound between RM3,800 and RM4,100 in January 2026, supported by a balanced supply-demand outlook, said the Malaysian Palm Oil Council (MPOC).

MPOC said the first quarter is typically the seasonal low for production, while demand is expected to improve ahead of the Lunar New Year and Ramadan, supporting a drawdown in stocks.

"However, spillover weakness from the energy market, coupled with abundant oilseed supplies, is likely to cap any sustained price recovery, keeping prices within a narrow trading range," it said in a statement.

Malaysia's palm oil production declined by 108,000 tonnes, or 5.3 per cent month-on-month, to 1.93 million tonnes in November.

Exports also fell short of expectations at 1.21 million tonnes, largely due to weaker demand from Sub-Saharan Africa after the region imported nearly 600,000 tonnes in October, resulting in reduced purchases in November.

Demand from the European Union (EU) also softened after the bloc confirmed a 12-month delay in the implementation of the EU Deforestation Regulation (EUDR), removing the need for importers to build precautionary stocks.

MPOC said the combination of strong production and weaker exports pushed Malaysian palm oil stocks to 2.83 million tonnes in November, the highest level since March 2019.

"Looking ahead to 2026, Malaysia's palm oil exports are forecast to rise to 16.2 million tonnes, while production is expected to ease to 19.7 million tonnes as oil palm trees enter a resting phase following solid performance in 2025," it said.

Meanwhile, MPOC said sentiment across the broader vegetable oil market has been pressured by declining crude oil prices, which fell to about US$55 per barrel in December 2025, the lowest level since February 2021.

"As a result, palm oil's price competitiveness has further improved relative to soybean oil and other competing vegetable oils, which is expected to translate into a pickup in global palm oil demand in the near term," it said.

While palm oil stocks in Malaysia remain elevated, rising by about one million tonnes compared with a year earlier, MPOC said Indonesia's stocks are expected to contract by year-end.

It said Indonesia's palm oil exports in 2025 are projected at 26.5 million tonnes, while domestic consumption is estimated at about 23 million tonnes, comprising about 10 million tonnes for food use and 13 million tonnes for biodiesel.

"Combined exports and domestic usage of about 49.5 million tonnes are broadly in line with estimated production of 49 million tonnes, implying a minor deficit in stocks.

"Collectively, the contrasting stock positions in Malaysia and Indonesia suggest there is no concern of oversupply," it said.

Read more at https://www.nst.com.my/business/economy/2025/12/1340577/palm-oil-prices-forecast-rm3800-rm4100-january-2026