MPOB Predicts Tight Global Supply to Keep Palm Oil Prices Stable in 2025

Palm Oil Magazine
MPOB Predicts Tight Global Supply to Keep Palm Oil Prices Stable in 2025. Photo by: Palm Oil Magazine

PALMOILMAGAZINE, KUALA LUMPUR – The Malaysian Palm Oil Board (MPOB) anticipates a promising year for the palm oil industry in 2025, driven by tight global supply and strong demand, which are expected to sustain the stability of crude palm oil (CPO) prices.

“With low initial palm oil stocks and strong prices as a foundation, 2025 is projected to be a financially favorable year for the industry. This forecast reflects positive performance expectations for the year,” stated MPOB Director-General Datuk Dr. Ahmad Parveez Ghulam Kadir, as quoted by Palmoilmagazine.com from Theedgemalaysia on Wednesday (15/1/2025).

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CPO prices are projected to average between RM4,000 and RM4,300 per ton in 2025, following an average of RM4,179.50 per ton in 2024 and RM3,809.50 per ton in 2023. The highest monthly average in 2024 was RM5,119.50 per ton in December, with the daily peak reaching RM5,333.50 per ton on December 6. On Tuesday, the third-month futures contract was trading at RM4,496.

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Indonesia’s B40 biodiesel mandate, originally scheduled to take effect on January 1, 2025, has been delayed due to infrastructure adjustments and technical considerations. Once implemented, the mandate is expected to significantly reduce the availability of palm oil for export, tightening global supply. “This will exert upward pressure on prices,” added Ahmad Parveez.

Additionally, rising biodiesel demand in the United States and shifting agricultural production patterns—allocating more land to corn instead of soybeans—could further exacerbate the global vegetable oil supply shortage.

MPOB estimates Malaysia’s CPO production will slightly increase from 19.34 million tons in 2024 to 19.5 million tons in 2025. Palm oil exports are expected to rise from 16.9 million tons in 2024 to 17.3 million tons in 2025, while stocks are projected to decline from 1.7 million tons to 1.6 million tons. Palm oil inventories are forecasted to remain below two million tons throughout the year, supporting price stability.

MPOB reaffirmed its commitment to balancing environmental sustainability, economic stability, and social responsibility within the palm oil sector. “The ministry and agencies will continue to work closely to address environmental issues while promoting economic and social stability, ensuring a sustainable and balanced future for the industry,” Ahmad Parveez concluded. (P2)

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