Malaysian crude palm oil was quoted at about $1,162/MT (RM4,688/MT) on 25 August, up 1.5% from the prior session, while the World Bank benchmark for palm oil stood at $1,101/MT and Indonesia’s Kemendag reference at $997/MT. The gap between Malaysian and Indonesian markers remains wide, and reports of Indonesia’s push to establish a national commodity exchange highlight the ongoing competition over pricing influence in the region.
On the supply side, MPOB’s July data showed Malaysian production at 1,792,979 tonnes, up 9.4% month-on-month, and closing stocks at 1,429,316 tonnes, up 7.2% month-on-month. Exports rose 14.5% to 1,392,178 tonnes and imports fell 51.9% to 49,566 tonnes. The stocks-to-use ratio printed at 12.5%. These figures indicate ample near-term availability at a time when output is still in its seasonal peak, which tends to cap upside despite strong export volumes.
Meanwhile, weather fundamentals point to a more uncertain second half. El Niño conditions remain in place with an ONI of +1.4, and dry conditions have been noted in Sarawak and Kalimantan. That has revived concern about longer-run production losses, with some reporting the worst impact may only show up in 2027. For now, the market is balancing current ample stocks against future supply risk.
Demand is supported by Indonesia’s B50 biodiesel rollout. Reports suggest the mandate is helping to keep farmer fresh fruit bunch prices supported, and Indonesia’s palm export levy receipts are projected at Rp41.22 trillion this year, with one industry body saying the B50 programme has not squeezed exports and levy collections have risen sharply. Additional demand-side support comes from India’s festival-season cooking oil imports, though broader edible oil dependence also matters.
Price action is where buyers need closest attention. After five consecutive sessions of gains, profit-taking emerged and crude oil was a factor. Brent was about $92/bbl, unchanged from the previous session, but profit-taking headlines came through to stall momentum. Our model outlook puts CPO at 52-week highs with an RSI of 78, suggesting near-term pullback or consolidation is likely. The wide BOPO spread, the B50 mandate and El Niño supply risks limit downside, while ample July stocks and peak production cap upside. We expect a modest net decline over the next seven days; our published path is +0.4% over seven sessions.
Takeaway for buyers: watch August export and production prints, Indonesian B50 implementation and levy flows, and any weather-driven revisions to 2027 supply. A technical pullback could widen near-term buying windows, but structural demand and dry weather may limit the downside.