Malaysian crude palm oil futures settled around $1,124 per tonne (RM 4,598) on Monday, up 1.7% from the previous session, supported by firmer crude oil and soybean oil prices. Brent crude rose 0.9% to about $93 per barrel, reinforcing the biodiesel blend economics that underpin palm oil demand.
Supply and stocks build
The latest MPOB data for June 2026 showed Malaysian CPO production at 1,638,777 tonnes, up 8.1% month-on-month, while closing stocks rose 3.7% to 1,332,697 tonnes. Exports increased 6.2% to 1,204,013 tonnes, but imports surged 135.3% to 103,113 tonnes, reflecting active arbitrage flows. The fresh fruit bunch reference price eased 1.3% to RM 48.90.
Weather and outlook
ENSO conditions remain in El Niño territory (ONI +1.0), but rainfall across the palm belts is broadly normal for now. Our model outlook sees a mildly firm 7-day trajectory, extending the recent upward drift within normal volatility, though seasonal headwinds may cap gains.
Biodiesel mandates tighten supply
Indonesia’s rollout of the B50 biodiesel programme continues to shape global palm oil balances. The mandate, which boosts domestic palm oil consumption, is seen reducing exportable surplus and supporting prices. India’s edible oil imports are expected to surge from July through October as supplies tighten ahead of festivals, according to Reuters. The Reserve Bank of India has flagged biofuel production as a factor behind elevated edible oil prices, citing Indonesia’s B50 mandate.
Rival oils and trade flows
Soybean oil and crude oil strength provided a tailwind for palm oil last week, with CPO futures hitting a two-week high. However, profit-taking may emerge after the recent rally, as noted by NST Online. Nepal’s edible oil exports to India, which benefit from a tariff advantage, have come under scrutiny, adding a layer of trade policy risk. Meanwhile, the EUDR exemption for palm oil waste highlights niche demand streams.
Key takeaway for buyers
Watch for further direction from crude oil and soybean oil markets, as well as any updates on Indonesia’s B50 implementation pace. The combination of rising production, firm biodiesel demand, and pre-festival buying from India suggests a balanced but price-supportive environment in the near term.