PALMOILMAGAZINE, KUALA LUMPUR – The continued high price of crude palm oil (CPO) compared to other vegetable oils, such as soybean oil, has led key Malaysian buyers—India, the European Union, and China—to shift towards cheaper alternatives.
A report by Gleanuk Economics indicates that Malaysia’s palm oil exports have hit their lowest level since February 2024. The primary reason is the average CPO price, which has remained at RM4,700 per metric ton (MT) this year, reducing demand from major markets.
Malaysia’s CPO stocks also dropped to 1.51 million tons in February 2025, the lowest level since March 2022, due to weak production and increased domestic consumption. Gleanuk further noted that rising exports of palm oil mill effluent (POME)-based oil have contributed to stock depletion, following Indonesia’s ban on “waste oil” exports.
Also Read: India’s Non-Palm Vegetable Oil Imports Hit Four-Year Low as Stocks Decline
According to Palmoilmagazine.com, citing The Edge Market on Thursday (March 13, 2025), TA Securities mentioned in a separate report that restocking activities ahead of Ramadan have been slower than usual. This suggests that Indian buyers are opting for cheaper alternative oils instead of palm oil.
Additionally, global markets are closely monitoring trade negotiations between China and the United States. Any potential trade tensions could impact soybean oil prices, potentially shifting the global vegetable oil demand landscape.
CPO Prices Expected to Decline in Q2 2025
Hong Leong Investment Bank (HLIB) forecasts that CPO prices will begin to decline in the second quarter of 2025. The key factors include the continued price premium of palm oil over other vegetable oils and the expected rise in global vegetable oil production.
“The decline in palm oil stocks is likely to continue into March 2025, especially as unfavorable weather conditions further constrain production. At the same time, high prices will limit restocking activity ahead of Ramadan,” HLIB noted.
Also Read: KPBN Inacom CPO Price Drops 0.66% on Friday (March 21), While Malaysian Palm Oil Futures Edge Up
Meanwhile, BIMB Securities projects that CPO prices will remain high in the first quarter of 2025, ranging between RM4,500 and RM5,000 per MT. However, prices are expected to decline to RM3,500–RM4,500 per MT for the remainder of the year.
Overall, analysts predict that the average CPO price in 2025 will range between RM3,800 and RM4,200 per MT. (P2)
