Malaysian CPO benchmark was about $1,133 per tonne on 15 September, up 0.4% from the previous session and equivalent to roughly RM4,608 per tonne at a USD/MYR rate of about 4.07. The World Bank global palm benchmark was around $1,117/t, while Indonesia’s Kemendag reference price sat near $1,008/t. Brent crude rose 0.9% to about $107/bbl, supporting the biodiesel-linked oil complex.
MPOB's August 2026 data showed Malaysian CPO production at 1,817,499 t, +1.4% month on month, while closing stocks jumped 15.2% to 1,645,570 t. Exports fell 7.5% to 1,294,664 t, contributing to a stocks-to-use ratio of 14.1%. The FFB reference price edged up 0.5% to RM49.76. This inventory build arrives during peak production season, adding near-term supply pressure to Malaysian prices.
On the demand side, biodiesel economics remain supportive. Brent’s move above $107/bbl strengthens the blend case, and Pertamina reportedly targets 100% distribution of B50 by end-September. Indonesia’s September CPO export levy reached US$148/t, raising the cost of Indonesian exports and potentially shifting some marginal demand toward Malaysian cargoes. A large Indian buyer's reported commitment to Malaysian palm oil and Malaysia-Russia talks to increase palm exports add demand hopes. However, the model outlook flags crowded long positioning and ample stocks as offsets.
Weather remains a wildcard. El Niño conditions with an ONI of +1.8 are ongoing, and Kalimantan dry conditions could affect Indonesian output into 2026/27, even as Indonesia is projected to produce 47.5 million tonnes of CPO and remain the world’s largest producer. Shipping risks in the Hormuz Strait also underpin crude and freight uncertainty.
Our model outlook sees consolidation near RM4,606 after a three-session slide, with technicals mixed: MACD negative below the five-session moving average, but a golden cross in longer averages. A wide BOPO spread of about $411/t and Indonesia’s export tax burden support a floor, while ample stocks and crowded long positioning cap rallies. Over the next seven sessions, the path points to modest weakness of about 0.8%, within a RM4,550–4,650 range, as bearish August stocks and peak-cycle supplies offset robust biodiesel economics and upcoming Diwali buying.
Takeaway for buyers: Watch closing stock levels, Malaysian export pace, and any escalation in Hormuz shipping costs. A confirmed acceleration in B50 absorption or fresh El Niño supply cuts could tighten the market, while sustained high stocks-to-use may keep nearby CPO capped below RM4,650.