InfoSAWIT, KUALA LUMPUR — The Malaysian Palm Oil Council (MPOC) forecasts that crude palm oil (CPO) prices will remain stable in the range of RM3,900 to RM4,200 per ton during June and July 2025. This projection comes despite Malaysia's palm oil stocks surging to a decade-high of 1.77 million tons in May.
In its official statement, MPOC noted that future CPO prices will continue to be supported by strong exports, increased price competitiveness compared to soybean oil, and high global crude oil prices.
"The increase in production in May was primarily driven by favorable weather conditions for harvesting," MPOC explained, as reported by InfoSAWIT from The Edge Market on Thursday, June 19, 2025.
Solid export demand, particularly from the two largest consumer countries—China and India—has been a major driver. These two countries accounted for 28% of Malaysia's total palm oil exports in May 2025.
Additionally, India's policy of reducing import duties on crude palm oil further strengthens Malaysia's position as a primary supplier. Currently, there is a 19.25% duty differential between crude palm oil and processed palm oil, which could enhance CPO's attractiveness in the Indian market.
"With Malaysia exporting more CPO than processed products, this change in India's policy opens positive opportunities for national palm oil industry players," MPOC stated in its remarks.
Moreover, the price gap between palm oil and soybean oil is widening. Currently, CPO is recorded as USD 83 per ton cheaper than soybean oil, providing strong price incentives for importers like India.
However, MPOC anticipates a slight slowdown in CPO production in June due to fewer harvesting days caused by several national and regional holidays. On the other hand, global vegetable oil prices remain stable, supported by easing trade tensions between the United States and China.
Nevertheless, the potential for CPO price increases is seen as limited due to the rising supply of soft vegetable oils globally. Sunflower and rapeseed oil production is expected to rise by up to 8.1 million tons in the next harvest season. Meanwhile, strong soybean production projections for 2025 are expected to leave ample stocks extending into 2026.
MPOC also highlighted dynamics in the United States that are driving soybean oil prices, particularly due to clean energy policies. Price surges are triggered by biofuel regulations under the Renewable Fuel Standard (RFS), which require fuel producers to blend biofuels or purchase compliance credits known as Renewable Identification Numbers (RINs). The Trump administration even proposed new mandates for biomass-based biodiesel.
Despite the dynamic global market, MPOC assesses the risk of price declines in July to be relatively low. This is because CPO stocks are expected to remain around two million tons, supported by strong exports and a gradual decline in production following the peak harvest in April and May.
With a combination of technical and fundamental factors, CPO prices are projected to remain stable in the coming weeks, although global market uncertainties should still be monitored by industry players. (T2)
