PALMOILMAGAZINE, KUALA LUMPUR – The Malaysian Palm Oil Council (MPOC) projects crude palm oil (CPO) prices will remain around RM4,400 per ton throughout June 2026 amid rising weather-related risks and continued uncertainty in the global vegetable oil trade.
According to The Edge Malaysia, the MPOC noted that global vegetable oil prices could potentially rebound after previously coming under pressure due to profit-taking by investment funds and market speculators.
The council noted that global supply risks remain elevated due to ongoing geopolitical tensions, combined with the potential emergence of the El Niño weather phenomenon, which could disrupt vegetable oil production during the upcoming season.
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“El Niño typically brings drier-than-normal conditions across Southeast Asia, reducing rainfall and soil moisture levels that may affect regional agricultural supplies,” MPOC stated.
Based on forecasts from the Malaysian Meteorological Department, El Niño conditions are expected to begin developing between June and July 2026 and could persist until early 2027.
MPOC also highlighted improving competitiveness for palm oil, particularly after developments in the United States biofuel sector pushed soybean oil prices higher in the European market. By mid-May 2026, soybean oil prices in Europe had climbed to their highest level since November 2022, making it the most expensive major vegetable oil globally.
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During that period, soybean oil traded at a premium of US$145 per ton over rapeseed oil, US$110 per ton above palm oil, and US$45 per ton higher than sunflower oil.
The situation has allowed palm oil to remain the most competitively priced vegetable oil in the Indian market. Malaysian palm olein was also traded slightly below Argentine soybean oil prices, helping sustain export demand.
On the supply side, Malaysia’s palm oil inventories in April 2026 edged slightly higher to 2.31 million tons. The increase was supported by seasonal production gains as dry weather improved harvesting activities and boosted fresh fruit bunch (FFB) yields.
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Meanwhile, Malaysian palm oil exports during January–April 2026 rose 25.5 percent year-on-year, increasing by approximately 1.1 million tons to 5.38 million tons — the highest level recorded since 2019.
However, monthly exports in April declined 14.3 percent to 1.30 million tons, although this still represented around 80 percent of Malaysia’s total palm oil production for the month.
MPOC also reported that combined palm oil exports from Malaysia, Indonesia, and Thailand increased by around 1.9 million tons during the first quarter of 2026. Nevertheless, the trend is expected to reverse between April and September 2026.
Referring to projections from Oil World, MPOC estimated that total combined exports from the three leading palm oil producers could decline by around two million tons during the second and third quarters of 2026.
The decline is expected to be driven mainly by lower Indonesian exports as a larger share of production is diverted toward domestic energy programs.
During the same period, Malaysian exports are projected to increase by around 400,000 tons, while Indonesian exports may decline by as much as 1.7 million tons.
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With these conditions, MPOC believes there will be no significant surge in regional palm oil inventories despite the industry entering its peak production season.
Separately, the United States Department of Agriculture (USDA) projected global oilseed production for the 2026/2027 season will reach a record high. Soybean production is expected to rise by 14 million tons, sunflower output by seven million tons, and rapeseed production by 1.4 million tons.
Overall, global production of the three major oilseed commodities is forecast to increase by around 4 percent, or 22.4 million tons, reaching a record 600 million tons in the upcoming season. (P2)
