Malaysia’s benchmark crude palm oil ended the latest session at RM4,613/MT, equivalent to about $1,143/MT and up 0.4% from the previous close. The World Bank global palm benchmark was $1,101/MT, while Indonesia’s Kemendag reference price stood at $997/MT. With USD/MYR around 4.03 and Brent crude near $90/bbl (+0.6%), the vegetable oil complex retains an energy-linked floor.
The July MPOB release showed Malaysia’s CPO production rose 9.4% month on month to 1,792,979 tonnes, with closing stocks up 7.2% to 1,429,316 tonnes. Exports grew 14.5% to 1,392,178 tonnes, but imports dropped 51.9% to 49,566 tonnes. The stocks-to-use ratio reached 12.5%, and the FFB reference price was RM49.50, up 1.2% month on month. The stock build is consistent with seasonal peak output and keeps near-term supply comfortable.
Weather remains the largest wildcard. El Niño conditions continue with an ONI of +1.4, and dry areas are reported in Sarawak, Sumatra/Riau, and Kalimantan. Indonesian producer groups have flagged that El Niño could reduce output, while one projection puts Indonesia’s 2026 production at 50.31 million tonnes. June Indonesian production was 5.28 million tonnes, an 8.59% month-on-month rise, and June exports surged 64% according to GAPKI.
Demand-side support comes from Indonesia’s B50 biodiesel mandate, which is framed by officials as part of energy independence, and from a wide palm–soy discount of $414/MT on BOPO. MPOC reportedly expects Malaysian CPO to hold above MYR4,600 in September on tighter supply and geopolitical disruptions. However, the Indonesian rupiah has weakened despite high rates and a softer US dollar, which may dent some importers’ purchasing power.
Our model outlook sees two-sided risk. The base case is modest upward drift with consolidation around $1,140–$1,180. El Niño supply fears, B50, and the wide discount support CPO near 52-week highs. But July Malaysian stocks sit 61% above the five-year average, seasonal production is peaking, speculative soyoil longs are crowded, and the weak rupiah adds pressure. Confidence is low because the anchor is four days stale and key inputs—Bursa futures, cargo-surveyor export pace, palm-specific positioning—are unavailable. The published path is +1.7% over seven sessions.
For buyers, the near-term signal is mixed: rising Malaysian inventories and peak output point to ample supply, while El Niño damage and Indonesia’s domestic biodiesel demand could tighten availability later. Watch the next export pace, Bursa positioning, and rainfall developments in the dry zones before adjusting coverage.