InfoSAWIT, KUALA LUMPUR – Crude palm oil (CPO) and palm kernel (PK) prices are expected to remain firm through 2026, supported by a moderate decline in Malaysian production and tightening global lauric oil supply.

In its latest research, CIMB Securities Sdn Bhd cited insights from a lauric oil seminar held on February 9 featuring experts from Glenauk Economics.

Malaysia’s palm oil production is projected to decline moderately in 2026, while Indonesia is expected to post slight output growth, potentially contributing to a gradual drawdown in inventories, as reported by New Straits Times on Wednesday (Feb 25, 2026).

Upstream Players Likely to Benefit

CIMB Securities noted that relatively strong CPO and PK price prospects could provide positive sentiment for upstream-focused companies.

Demand for palm-based specialty fats is also expected to remain resilient amid tight lauric oil supply, particularly for applications such as coatings, non-dairy creamers, and specialty food products.

Despite challenges in the oleochemical sector due to excess capacity and margin pressure, the downstream performance of IOI Corp and Kuala Lumpur Kepong Bhd (KLK) is expected to stabilize following margin compression in FY2025.

CIMB maintains an “Overweight” outlook on the plantation sector, highlighting SD Guthrie, IOI, and Hap Seng Plantations among its top picks. (T2)