Tighter exports, biodiesel demand to support CPO prices
13/04/2026 (New Straits Times), Kuala Lumpur - Crude palm oil (CPO) prices are expected to remain well supported amid tightening regional export supply, as Thailand and Indonesia prioritise domestic biodiesel programmes, alongside weather risks linked to a developing El Niño.
Public Investment Bank Bhd (PublicInvest) said Malaysia's palm oil inventories are likely to edge towards the psychological two million tonne level over the next two months.
Inventories recently recorded their sharpest decline since March 2023, as major consuming countries stepped up stockpiling amid heightened geopolitical tensions.
CPO prices also rallied in March, rising more than 19 per cent, supported by higher crude oil prices and rising freight costs following the escalation of Middle East conflicts.
These factors have boosted the appeal of biodiesel as a more secure alternative fuel, lifting demand for palm-based biofuels.
PublicInvest maintained its "Overweight" call on the plantation sector and reiterated its full-year CPO price forecast of RM4,400 per tonne.
On regional developments, Thailand is tightening palm oil exports to safeguard domestic supply.
The world's third-largest palm oil producer is projected to produce about 21.8 million tonnes of fresh fruit bunches, equivalent to 3.9 million tonnes of CPO, accounting for around 4.6 per cent of global output.
PublicInvest said the export curbs are aimed at building inventories for biodiesel production and stabilising domestic cooking oil prices amid intensifying geopolitical tensions.
The move is expected to further tighten regional export availability, especially as Indonesia continues to prioritise palm-based biodiesel for domestic consumption.