On 14 September, Malaysian CPO benchmark closed around $1,128/MT (RM4,596/MT), down 0.8% from the previous session, with the World Bank benchmark at $1,117/MT and Indonesia’s reference at $1,008/MT. Brent crude edged down 0.3% to about $107/bbl, keeping biodiesel blend economics relatively strong; the ringgit was at about 4.07 per dollar.
Latest MPOB August figures show Malaysian CPO production rose 1.4% month-on-month to 1,817,499 tonnes. Closing stocks jumped 15.2% month-on-month to 1,645,570 tonnes, while exports fell 7.5% to 1,294,664 tonnes and imports were nearly flat. The stocks-to-use ratio reached 14.1%, a bearish supply signal near seasonal peak output.
El Niño conditions persist (ONI +1.8) and Kalimantan rainfall is noted as dry, which could tighten future output if moisture stress extends. Indonesia, projected to produce 47.5 million tonnes of CPO in 2026/2027, may keep more palm oil at home as B50 biodiesel distribution is targeted to reach full coverage by end-September. State energy firm Pertamina has indicated the 100% distribution goal, and Indonesia says the shift will cut diesel imports and save about IDR 170 trillion.
News flow and policy News flow is mixed. One report projects CPO to hold in the RM4,400–4,600/tonne range, supported by the B50 mandate and global supply risks. Another notes September CPO prices rose and Indonesia’s export levy reached $148 per tonne. AWL has committed to import Malaysian palm oil. However, palm futures ended lower on weaker rival oils and weaker export estimates earlier in the session. The Hormuz Strait crisis serves as a reminder that energy disruptions can support vegetable oil demand via fuel substitution, though direct palm impact is indirect.
Model view and buyer focus Our model outlook: The anchor close of RM4,598 on 11 September is now stale by three days. August’s stock build and seasonal peak production are near-term bearish, but a wide BOPO spread, Indonesia’s B50 ramp-up, high Brent and a softer ringgit are capping downside. We expect choppy consolidation with a slight downward bias. High uncertainty remains due to missing cargo surveyor, Bursa FCPO and Dalian data; the published path is -0.8% over seven sessions.
Buyers should watch next export estimates, any confirmation of B50 distribution hitting full coverage, and weather updates from Kalimantan. The market’s downside appears cushioned but not eliminated; inventory builds could pressure nearby contracts if export demand does not recover.