PALMOILMAGAZINE, BANGI – The Malaysian Palm Oil Board (MPOB) expects crude palm oil (CPO) prices to remain at historically strong levels throughout 2026, supported by elevated global crude oil prices, geopolitical uncertainty, and relatively tight supply conditions.
As quoted from The Edge Malaysia, Friday, July 3, 2026. According to Datuk Dr. Ahmad Parveez Ghulam Kadir, Director General of MPOB, the average CPO price this year is projected to range between RM4,000 and RM4,300 per metric ton.
Speaking after the MPOB Palm Oil Technology Transfer (TOT) 2026 program in Bangi on June 30, Ahmad Parveez said continued geopolitical tensions around the Strait of Hormuz—one of the world’s most critical energy shipping routes—have disrupted global energy markets, providing additional support for palm oil and other vegetable oil prices.
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“Based on current market conditions, palm oil prices remain resilient. We expect the average CPO price this year to stay within the RM4,000 to RM4,300 per ton range,” he said.
He noted that crude oil and vegetable oil markets are closely linked. When disruptions tighten global energy supplies and drive up petroleum prices, demand for alternative feedstocks—including vegetable oils such as palm oil—tends to strengthen, helping sustain prices in international markets.
El Niño Continues to Affect Production
Despite favorable price prospects, Malaysia’s palm oil industry continues to face production challenges stemming from the lingering effects of the recent El Niño weather pattern.
According to Ahmad Parveez, the impact of El Niño extends beyond the dry period itself, as it can reduce plantation productivity by disrupting the natural pollination process.
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Higher temperatures and reduced rainfall lower the activity of the oil palm pollinating weevil, an insect essential for fruit formation. Reduced pollination ultimately affects fruit set and can lower oil extraction efficiency.
“We continue to monitor the post-El Niño impacts. Hotter weather does not immediately reduce production, but it can suppress pollination activity, ultimately affecting plantation productivity and oil extraction rates,” he explained.
Preparing Smallholders for EUDR Compliance
Beyond market fundamentals, MPOB is also preparing Malaysia’s palm oil sector for the implementation of the European Union Deforestation Regulation (EUDR), which will apply to smallholders beginning in the middle of next year.
Ahmad Parveez said more than 80% of smallholders in Peninsular Malaysia have already met the initial requirements for compliance with the regulation.
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MPOB aims to integrate 90–95% of licensed smallholders with clear land ownership status into the national compliance system before the regulation takes effect.
Achieving that target would help ensure palm oil produced by Malaysian smallholders continues to access the European Union market without facing regulatory barriers.
The initiative forms part of Malaysia’s broader strategy to safeguard the competitiveness of its palm oil exports as sustainability standards become increasingly stringent in key international markets, particularly Europe. (P2)
