Malaysian benchmark CPO slipped to about $1,143 per tonne, down 0.8% from the previous session and equivalent to RM4,626 per tonne at an exchange rate around 4.05 ringgit per dollar. The World Bank palm oil benchmark stood near $1,117 per tonne, while Indonesia’s September reference price was about $1,008 per tonne. Brent crude was flat at about $96 per barrel, keeping biodiesel blending economics broadly stable. Futures weakness reflected softer soybean oil and expectations of higher Malaysian inventories.
July MPOB data showed Malaysia’s CPO production rose 9.4% month on month to 1,792,979 tonnes, while closing stocks climbed 7.2% to 1,429,316 tonnes. Exports also expanded 14.5% to 1,392,178 tonnes, and imports fell 51.9% to 49,566 tonnes. The stocks-to-use ratio was 12.5%, and the FFB reference price rose 1.2% to RM49.50. With the upcoming MPOB report widely expected to show August inventories at a seven-month high, the near-term supply picture looks comfortable. El Niño conditions persist, with an ONI of +1.8, but rainfall has been broadly normal across growing belts, tempering immediate production worries while keeping longer-term weather risk on the radar.
Indonesia’s policy settings continue to shape demand and trade flow. The September CPO reference price rose 1.1% to US$1,007.51 per tonne, keeping the export levy unchanged at US$148 per tonne. B50 biodiesel has been officially implemented and is reported to have reached 90% of Pertamina fuel stations. GAPKI has cautioned that the 2027 mandate will need flexibility and that Indonesian palm oil output could drop 2.9% next year, highlighting supply challenges. Export levy concerns are also in focus because higher charges could pressure farm-gate FFB prices. Indonesian CPO exports grew 5.49%, and officials continue to promote downstream use, including B50 and ethanol E20 in South Sumatra. A used cooking oil price portal launched by MPOB adds another feedstock signal for circular-economy biodiesel supply.
Our model outlook sees a tug-of-war between the upcoming MPOB report’s expected seven-month high in August inventories and rising El Niño/B50 demand. We expect choppy trade around $1,140–$1,160, with a slight downward bias into the data, followed by a rebound on supportive biodiesel and weather headlines. The model’s anchor is three days stale, widening uncertainty, and the published path implies a 0.6% move over seven sessions.
What to watch: the MPOB August report for confirmation of stock builds, Indonesian export levy and reference price updates, B50 implementation rates, and any shift in El Niño rainfall patterns. Buyers may want to track these triggers rather than chase near-term price dips.