PALMOILMAGAZINE, KUALA LUMPUR — The Malaysian Palm Oil Council (MPOC) projects that crude palm oil (CPO) prices will remain stable in the range of RM3,900 to RM4,200 per ton throughout June and July 2025. This outlook persists despite Malaysia’s palm oil stocks in May surging to 1.77 million tons—the highest level for the month in a decade.
In its official statement, MPOC explained that CPO prices are expected to hold steady, supported by strong export demand, improved price competitiveness against soybean oil, and persistently high global crude oil prices.
“The production increase in May was primarily driven by favorable weather conditions that supported harvesting,” MPOC noted, as reported by Palmoilmagazine.com citing The Edge Markets on Thursday, June 19, 2025.
Robust demand from Malaysia’s two biggest buyers—China and India—remains a major price driver, with both countries accounting for 28% of total Malaysian palm oil exports in May 2025.
India’s recent reduction in import duties on crude palm oil further strengthens Malaysia’s position as a key supplier. Currently, there is a 19.25% duty gap between crude and refined palm oil, making CPO increasingly attractive to Indian importers.
“As Malaysia exports more crude palm oil than refined products, India’s policy shift creates positive momentum for the domestic industry,” the MPOC added.
Another factor bolstering palm oil’s appeal is the widening price gap between CPO and soybean oil. As of now, CPO is USD 83 per ton cheaper than soybean oil, providing a compelling price advantage for large importers like India.
However, MPOC expects CPO production to slow slightly in June due to fewer harvesting days caused by national and regional holidays. On the global front, vegetable oil prices remain relatively stable, buoyed by easing trade tensions between the United States and China.
Still, MPOC warns that the upside potential for CPO prices may be limited due to increased global supply of soft oils. Sunflower and rapeseed oil production is projected to grow by 8.1 million tons in the next harvest season, while soybean production in 2025 is expected to generate surplus stock that will carry over into 2026.
MPOC also highlighted developments in the United States that are driving up soybean oil prices, particularly energy policies under the Renewable Fuel Standard (RFS). This program mandates fuel producers to blend biofuels or purchase compliance credits known as Renewable Identification Numbers (RINs). The Trump administration has even proposed new mandates for biomass-based biodiesel.
Despite global market volatility, MPOC sees minimal downside risk for CPO prices in July. Stock levels are expected to hover around 2 million tons, supported by strong export performance and a slowdown in production following peak harvest months in April and May.
With a mix of technical and fundamental factors at play, MPOC anticipates CPO prices will remain stable in the coming weeks. Nonetheless, industry players are advised to stay alert to ongoing uncertainties in the global market. (P2)
