PALMOILMAGAZINE, Kuala Lumpur — Crude palm oil (CPO) prices are expected to trade within a relatively narrow range throughout 2026, according to CIMB Securities Sdn Bhd after attending the 37th Palm and Lauric Oils Price Outlook Conference 2026.
Based on insights shared by conference speakers, CPO prices in the first half of 2026 are projected to fluctuate between RM3,800 and RM4,400 per ton. In the second half, prices are seen ranging slightly wider, between RM3,800 and RM4,500 per ton. For the full year, estimates cluster within the RM3,800–RM4,500 per ton band.
CIMB noted that the average price assumption among speakers stood at around RM4,140 per ton. This is marginally above CIMB’s internal forecast of RM4,000 per ton and slightly higher than the current CPO price of RM4,082 per ton, suggesting limited upside potential if targets are met.
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As reported by New Straits Times on Monday (16/2/2026), CIMB cautioned that near-term sentiment toward the plantation sector remains guarded. Several factors are expected to cap price gains in the first half of 2026.
These include elevated Malaysian palm oil inventories, delays in Indonesia’s B50 biodiesel mandate, abundant soybean supplies from South America, and high vegetable oil stocks in key consuming countries such as Pakistan. Intensifying competition from other vegetable oils is also seen restricting short-term price appreciation.
Divided Outlook for Second Half
Market views become more divided heading into the second half of 2026. The more optimistic camp expects firmer prices, driven by potential supply disruptions due to unfavorable weather and land seizure policies involving Agrinas. Additional support could come from increased biodiesel usage in the United States, which may strengthen soybean oil prices, as well as the possibility of Indonesia resuming full implementation of the B50 mandate — tightening global palm oil supply.
However, the more cautious camp remains concerned about persistent large soybean harvests in South America, potential delays in U.S. biodiesel policy support, and weaker industrial demand for palm oil if global crude oil prices remain subdued.
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Other downside risks include Indonesia’s fiscal constraints in funding biodiesel subsidies, slower global economic growth, and a potential reversal in AI-driven equity market rallies that could dampen overall investor sentiment. There are also concerns about palm oil gradually losing food market share amid stiff competition from alternative vegetable oils.
“Overweight” Call Maintained
Although the average 2026 CPO price projection of RM4,140 per ton is slightly below the 2025 average of RM4,292 per ton, CIMB believes the modest year-on-year decline could be offset by stronger production growth and potential gains from land monetization initiatives.
With a more constructive medium-term outlook, CIMB continues to maintain an “Overweight” recommendation on the plantation sector. (P2)
