PALMOILMAGAZINE, JAKARTA — Malaysian palm oil futures are likely to remain under pressure in the near term, as persistent high production—particularly in Malaysia—continues to drive a build-up of global stocks and weigh on market sentiment.
Citing Reuters, vegetable oil industry analyst Dorab Mistry said abundant supply has become the main factor preventing prices from recovering.
The benchmark March palm oil contract on the Bursa Malaysia Derivatives Exchange (BMD) closed at 4,043 ringgit per ton last Friday, after earlier touching its lowest level in more than six months in December 2025.
“Palm oil futures on the BMD are under pressure. Fund investors have exited the market, and this weakness is likely to persist until production genuinely declines,” Mistry said at an industry conference in Karachi, Pakistan.
Back in November, Mistry had projected palm oil prices could climb to as high as 5,500 ringgit per ton during the January–March period. That bullish outlook was based on expectations that Indonesia would take over more plantations and move closer to implementing a mandatory B50 biodiesel blending program.
However, recent developments have shifted that view. Mistry noted that global palm oil production has risen by around 1 million tons above earlier forecasts. At the same time, inventories have surged, while biofuel demand—particularly from the United States—has fallen short of expectations.
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In Malaysia, the world’s second-largest palm oil producer, palm oil inventories are now projected to exceed 3 million metric tons, well above the earlier estimate of around 2 million tons, as output has remained strong since October.
These conditions have kept market participants cautious, as they await clearer signs of declining production or a recovery in global demand that could help support palm oil prices going forward. (P3)
