The Edge Markets (25/06/2026) - KUALA LUMPUR (June 25): Malaysian plantation stocks fell on Thursday as prices of palm oil slumped along with that of crude oil while analysts are watching the weather closely for comfort.

Softer demand from key importing countries has added to the pressure on palm oil, David Ng, a derivatives trader at Iceberg X Sdn Bhd, told The Edge. Demand for Malaysian palm oil has been weak compared with earlier months amid slowdown in orders from major importer India and China, he noted.

But the decline in crude oil amid easing tensions in the Middle East is the bigger reason for the lower prices of palm oil, Ng said.

United Plantations Bhd (KL:UTDPLT) fell RM1.32 or nearly 4% to RM32.30 while Kuala Lumpur Kepong Bhd (KL:KLK) slipped 42 sen or 1.9% to RM21.18. Bursa Malaysia Plantation Index, which tracks 39 stocks in the sector, fell as much as 1.5%.

The most-traded palm oil futures contract was down RM78 to RM4,555 in its third straight day of decline on Bursa Malaysia Derivatives. Brent, the global benchmark for crude oil, has fallen to below US$73 from over US$100 at the height of the Iran war.

Despite the near-term weakness, prices of the edible oil used in everything from lipstick to biodiesel are expected to remain supported amid concerns over the El Nino weather conditions, said CIMB Securities analyst Ivy Ng.

Planters’ lower fertiliser application and Indonesia’s B50 biodiesel mandate could also help underpin prices, she added. 

El Nino has developed and spells drought and heatwaves in Malaysia and Indonesia. Weather scientists believe the latest occurrence could shape up to be moderate or strong, which could shrivel palm trees and lower production in both countries that account for nearly 90% of the global supply.

Indonesia, meanwhile, is pushing ahead with the programme that will raise the mix of palm-based methyl ester to 50% in biodiesel in a move that will help the country cut its reliance on import of crude oil. 

Read more at https://theedgemalaysia.com/node/808292