Market snapshot

Malaysian CPO benchmark is about $1,153/MT, down 0.2% from the previous session, or RM4,661/MT at USD/MYR around 4.04. The World Bank palm oil benchmark is about $1,117/MT and Indonesia's Kemendag reference is about $1,008/MT. Brent crude is about $95/bbl, down 0.3%, which matters for biodiesel blend economics.

Supply and stocks

MPOB July 2026 data show Malaysian CPO production at 1,792,979 tonnes, up 9.4% month-on-month, while closing stocks rose 7.2% to 1,429,316 tonnes. Exports grew 14.5% to 1,392,178 tonnes, but imports fell 51.9% to 49,566 tonnes. The stocks-to-use ratio is 12.5%, and the FFB reference rose 1.2% to RM49.50. These are ample July numbers and one reason the market is not surging despite bullish policy signals.

El Niño and Indonesia policy

Weather remains a supply-side risk. ENSO is El Niño with ONI +1.4, though rainfall is broadly normal across the belts. GAPKI headlines say El Niño is estimated to press Indonesian production by up to 3 million tonnes, and Indonesia's 2027 palm oil output is projected to drop 2.9% to 56.8 million tonnes. GAPKI also framed El Niño impact as manageable and expressed industry optimism on B50 implementation in 2026. At the same time, Indonesia is consolidating raw materials and technical specifications for accelerated B60 in 2027, while the September CPO reference price and export duty were set higher, with duty at USD148 per MT. MPOC expects CPO prices to stay above MYR4,600 in September amid tightening supply and geopolitical disruptions.

Price read-through

Brent near $95/bbl supports biodiesel blending economics, and Indonesian policy signals add medium-term demand for palm oil. However, the ample July MPOB stocks and soft September seasonality argue against a sharp move. Our model outlook anchors CPO at $1,152/MT (MYR4,658), near a 52-week high, and sees choppy consolidation with modest upside into the August MPOB release; missing cargo-survey and Bursa data widen uncertainty. The published path is +1.2% over seven sessions. That anchors the range near the 52-week high, so buyers should note upside may be gradual rather than abrupt.

What buyers should watch