InfoSAWIT, KUALA LUMPUR — Malaysia’s crude palm oil (CPO) prices are expected to remain stable through the second half of 2025, supported by solid export momentum, manageable stock levels, and policies aimed at lowering production costs. Analysts project prices to hover between RM4,000 and RM4,300 per ton for the remainder of the year.
Public Investment Bank Bhd said in its latest research note that Malaysia’s CPO stockpile has now surpassed two million tons, providing a strong buffer for global price stability. “As of this report, CPO futures are trading at RM4,330 per ton. Export demand—especially from India—is likely to strengthen, driven by the wide price gap between palm oil and soybean oil, as well as India’s low domestic inventories,” the bank said, as quoted by The Edge Markets.
The bank maintained its average annual price forecast at RM4,200 per ton.
Although producers experienced higher operating costs in the first half due to rising minimum wages and fertilizer prices, the outlook for the second half appears more favorable. Public Investment Bank expects costs to ease as fresh fruit bunch (FFB) productivity improves and revenues from palm kernel by-products increase.
“Palm kernel credits are expected to lighten the cost burden,” the report noted.
Further relief is expected from labor policy revisions. Beginning October 2025, the implementation of a mandatory 2% contribution to the Employees Provident Fund (EPF) for foreign workers is projected to reduce labor-related costs by almost 1%.
Demand fundamentals are also being bolstered by the energy sector. Indonesia’s B40 biodiesel program is expected to remain on track, providing long-term support for palm oil as a biofuel feedstock.
However, the bank warned that environmental risks could disrupt the outlook. Rising numbers of hotspots in Sumatra and Kalimantan raise concerns over potential transboundary haze during the dry season, which could hamper logistics and supply chains. (T2)
