PALMOILMAGAZINE, KUALA LUMPUR – Crude palm oil (CPO) prices are forecasted to reach RM4,000 per metric ton in 2026, according to the latest outlook by Kenanga Investment Bank Bhd (Kenanga Research). While prices have retreated from their late-2024 peaks, the market is expected to remain stable amid ongoing global challenges.
In its latest research report, Kenanga Research noted that during the first quarter of 2025, CPO enjoyed a price premium over soybean oil. However, that advantage has since diminished. Simultaneously, demand for biodiesel—particularly from the United States—has weakened, although stockpiling activities by buyers continue.
“A supply deficit is likely to persist throughout 2025, significantly tightening inventories on a year-over-year basis. Therefore, CPO prices are projected to remain firm within the RM4,000–RM4,500 per ton range,” the report stated, as quoted by Palmoilmagazine.com from The Malaysian Reserve on Tuesday (May 13, 2025).
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Kenanga Research anticipates an average CPO price of RM4,200 per ton in 2025, slightly easing to RM4,000 per ton in 2026.
Despite challenges posed by renewable energy trends and global trade pressures, the plantation sector remains resilient. The report highlighted the industry’s defensive revenue base, noting that over two-thirds (70%) of vegetable oil demand is food-related, while approximately 23% is tied to biodiesel production.
“Palm oil demand has proven robust, with steady annual growth—even in the face of global economic slowdowns, protectionist trade policies, and geopolitical tensions,” the report added.
Financially, plantation companies are in strong shape. Many palm oil producers maintain net cash positions or manageable debt levels, supported by healthy profit margins thanks to favorable prices of both CPO and palm kernel.
With price stability and resilient demand, the plantation sector continues to attract investor interest—especially amid global uncertainty. Backed by high price forecasts and strong company fundamentals, the palm oil industry is poised to remain a key pillar of the region’s agribusiness economy. (P2)
