Malaysian crude palm oil is quoted around $1,107 per tonne, up 0.1% from the prior session and equivalent to about RM4,525 per tonne at a USD/MYR rate of 4.08. The World Bank benchmark is near $1,101, while Indonesia's reference sits near $1,030, leaving Malaysian material at a premium that could influence destination choices. Brent crude is around $89 per barrel, down 0.2%, still high enough to keep biodiesel blending economics relevant.
July MPOB figures underline the seasonal build. Production rose 9.4% month on month to 1,792,979 tonnes, while closing stocks climbed 7.2% to 1,429,316 tonnes, the highest in five months. Exports jumped 14.5% to 1,392,178 tonnes, imports fell 51.9% to 49,566 tonnes, and the stocks-to-use ratio reached 12.5%. The FFB reference price edged up 1.2% to RM49.50. Peak production is beginning, but the strong export draw prevented an even larger inventory overhang.
Forward supply risk is the counterweight. El Niño conditions, with an ONI of +1.4, have left Sarawak and Kalimantan dry. Indonesia's push toward B50 and B100 biodiesel, including subsidy discussions and restrictions on diesel imports, channels more palm oil into domestic energy use. The wide $475 BOPO spread cited in our model outlook adds support. Malaysia is also exploring palm oil for data-centre cooling, a potential new demand source. India's July edible oil import data added to demand-side focus, while inflation warnings point to Black Sea supply disruptions and El Niño as threats to vegetable oil costs.
News flow is mixed. Bernama reports expectations of firm CPO on tighter supply, while an earlier session saw declines linked to weaker Dalian and Chicago edible oils and lower crude. Seasonal pressure from cheaper rapeseed and sunflower oil from Ukraine and Russia is also noted. Futures had earlier rallied above RM4,750 before consolidating near current levels. Malaysia's decision to lower the September reference price while keeping duty at 10% may influence near-term export competitiveness.
Our model outlook sees CPO consolidating around $1,107, with a modest upward drift over the next seven trading days. Daily moves are likely to stay within the recent $1,093-$1,117 Bollinger band. Bullish biodiesel and supply-risk news is expected to offset seasonal stock-build pressure. Missing cargo-survey export pace and live FCPO quotes add uncertainty to that path, with a published path of +0.1% over seven sessions.
For buyers, the key watchpoints are cargo-survey export numbers, Indonesia's biodiesel timeline and subsidy rules, rainfall across Sarawak and Kalimantan, and any sharp moves in Dalian/Chicago rival oils or Brent crude.