InfoSAWIT, KUALA LUMPUR – The Malaysian Palm Oil Council (MPOC) has projected crude palm oil (CPO) prices to remain around RM4,400 per ton throughout June 2026, supported by rising weather-related risks and ongoing uncertainty in the global vegetable oil trade.
According to The Edge Malaysia, as reported by InfoSAWIT on Friday (May 22, 2026), MPOC noted that global vegetable oil prices could strengthen again after facing pressure from profit-taking activities by investment funds and market speculators.
MPOC highlighted that global supply risks remain elevated due to unresolved geopolitical tensions, compounded by the potential emergence of the El Niño weather phenomenon, which could disrupt vegetable oil production in the upcoming season.
“El Niño typically brings drier-than-normal weather conditions across Southeast Asia, reducing rainfall and soil moisture that may affect regional agricultural supply,” MPOC stated in its official report.
Based on forecasts from the Malaysian Meteorological Department (MET), El Niño conditions are expected to develop between June and July 2026 and could persist until early 2027.
MPOC also observed that palm oil competitiveness has improved significantly, particularly after developments in the United States biofuel sector pushed soybean oil prices higher in the European market. By mid-May 2026, soybean oil prices in Europe had climbed to their highest level since November 2022, making it the most expensive major vegetable oil globally.
During that period, soybean oil traded at a premium of US$145 per ton over rapeseed oil, US$110 per ton above palm oil, and US$45 per ton higher than sunflower oil.
This pricing dynamic has kept palm oil as the most competitively priced vegetable oil in the Indian market. In addition, Malaysian palm olein has been trading slightly below Argentine soybean oil prices, helping sustain export demand.
On the supply side, Malaysian palm oil inventories in April 2026 edged up slightly to 2.31 million tons. The increase was supported by seasonal production gains after drier weather conditions improved harvesting activities and boosted fresh fruit bunch (FFB) yields.
Meanwhile, Malaysia’s palm oil exports during January–April 2026 rose 25.5% year-on-year, or approximately 1.1 million tons, reaching 5.38 million tons — the highest level since 2019. However, monthly exports in April declined 14.3% to 1.30 million tons, although still equivalent to around 80% of Malaysia’s total palm oil production during the month.
MPOC further revealed that combined palm oil exports from Malaysia, Indonesia, and Thailand increased by about 1.9 million tons in the first quarter of 2026. Nevertheless, the trend is expected to reverse during the April–September 2026 period.
Referring to Oil World projections, total exports from the three leading palm oil-producing countries are forecast to decline by around two million tons during the second and third quarters of 2026. The decline is mainly attributed to lower Indonesian exports as more production is redirected toward domestic energy requirements.
During the same period, Malaysian exports are expected to increase by around 400,000 tons, while Indonesian exports could decline by as much as 1.7 million tons. Under these conditions, MPOC believes regional palm oil inventories are unlikely to experience a major build-up despite entering peak production season.
Separately, the United States Department of Agriculture (USDA) projects global oilseed production for the 2026/2027 season to reach a record high. Soybean production is forecast to rise by 14 million tons, sunflower production by seven million tons, and rapeseed output by 1.4 million tons.
Overall, combined production of the world’s three major oilseed commodities is projected to increase by approximately 4%, or 22.4 million tons, reaching a record 600 million tons in the coming season. (T2)
