Fluctuating Fortunes: Malaysian Palm Oil Market in 2026

Malaysian crude palm oil prices are anticipated to dip slightly in 2026 compared to 2025 due to increased supply and reduced biodiesel demand. Despite Indonesia's decision to maintain the B40 biodiesel blend, enhanced production levels in key producing nations could impact price stability.

Malaysian crude palm oil futures are predicted to average lower in 2026 than in the previous year. A Reuters poll attributes this to stronger supplies from leading producers and weaker biofuel demand, which could exert downward pressure on prices.

While benchmark palm oil prices are projected to average 4,125 ringgit per metric ton this year, marking a 2.55% decline from 2025, it contrasts last year's increase driven by Indonesia's B40 biodiesel blend rollout, despite significant market supply.

Indonesia's abandonment of a proposed increase to the B50 blend due to technical and funding issues, along with favorable weather boosting production, has shifted the focus back to supply levels. Production predictions show a slight increase in Indonesia, while Malaysia faces a marginal output decrease due to labor and plantation challenges.

(With inputs from agencies.)