InfoSAWIT, KUALA LUMPUR — Crude palm oil (CPO) prices are expected to remain firm in 2026, with a steady tone and upside potential toward the end of the first quarter, according to Maybank Investment Bank Bhd (Maybank IB).

In its latest research note, Maybank IB projected CPO prices to average RM4,100 per metric ton in 2026, trading in a range of RM3,700 to RM4,700 per ton.

Maybank IB said CPO prices next year will likely be influenced by seasonal trends, but could also face renewed volatility driven by Indonesia’s biodiesel policy direction—particularly discussions over a possible B50 mandate.

The bank noted that its current base case remains B40, in line with biodiesel quotas allocated for 2026. That means, without major surprise announcements from Indonesia, price swings could be more contained.

“Nevertheless, discussions around Indonesia’s B50 plan may sway market prices in 2026, as seen in the third quarter of 2025,” Maybank IB said, as cited by InfoSAWIT from Bernama on Tuesday (January 13, 2026).

Early 2026 Could Start Soft, Q1 May Turn More Bullish

Maybank IB expects 2026 to start on a slower note due to high carried-over stockpiles. But the bank said market sentiment could turn more upbeat toward the end of the first quarter, when demand from Chinese New Year (February) and Ramadan (February–March) coincides with seasonally lower palm oil output.

“We would be more upbeat on CPO prices toward the end of the first quarter of 2026 as Chinese New Year and Ramadan demand coincides with the typical low-output cycle in the first quarter,” the bank said.

5–10% Upside Risk if B50 Goes Unconditionally

Maybank IB also highlighted a five to 10 percent upside risk to its forecast if Indonesia proceeds with B50 without conditions.

However, the bank said funding remains uncertain due to the wide palm oil–gas oil (POGO) spread. It expects the Indonesian government may attempt to raise export levies in 2026 to help finance the mandate.

Sector View Remains Neutral

Maybank IB maintained a neutral stance on the sector, with potential price upside offset by regulatory risks from Indonesia.

Going forward, the bank expects price upside in 2026 to be more demand-driven, as supply growth is forecast to remain muted. It also advocated a short-term trading strategy toward the end of the first quarter while waiting for more clarity from Indonesia and the United States regarding their reported biofuel ambitions. (T2)