PALMOILMAGAZINE, KUALA LUMPUR — Malaysia’s palm oil industry is projected to enter 2026 with a more solid foundation, although price volatility, shifting global trade regulations, and climate-related risks continue to pose potential challenges to the sector’s resilience.
Director General of the Malaysian Palm Oil Board (MPOB), Datuk Dr Ahmad Parveez Ghulam Kadir, said the outlook for production next year is being viewed with cautious optimism. Weather conditions, he noted, remain a critical variable that could significantly influence production performance.
In addition, ongoing replanting activities are expected to moderate production growth in the short term, as young palms have yet to reach optimal productivity. Nevertheless, replanting is seen as a necessary investment to ensure the long-term health and sustainability of the industry.
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“Overall, MPOB sees Malaysia’s palm oil industry as being structurally sound. Replanting programs and productivity improvements are expected to strengthen production prospects over the medium term,” Ahmad Parveez said, as quoted by Palmoilmagazine.com from Business Times, Tuesday (30/12/2025).
Firm Prices, High Volatility
On pricing, Ahmad Parveez expects crude palm oil (CPO) prices in 2026 to remain relatively strong, albeit with elevated volatility. Price support is largely underpinned by steady global demand, including continued growth from the biofuel sector.
In the near term, however, CPO price movements are likely to be heavily influenced by fluctuations in global crude oil prices as well as policy dynamics in key consuming markets.
A similar view was echoed by economist and plantation industry expert Dr Mohd Zulkufli Zakaria. He projects CPO prices in 2026 to range between RM3,800 and RM4,500 per ton. For 2025, which is nearing its end, prices are estimated to trade between RM3,800 and RM4,300 per ton, supported by sustained growth in global consumption.
Several international forecasts, including those from the United States Foreign Agricultural Service, estimate global palm oil consumption to expand by around 2.5 to 3.0 percent.
According to Mohd Zulkufli, continued demand growth and rising biofuel usage will keep prices supported, alongside supply dynamics in major producing countries. Indonesia, for instance, is increasingly absorbing more palm oil for domestic use, with consumption estimated at 13–14 million tons—up significantly from around 12 million tons in 2014.
At the same time, expansion in renewable diesel production in countries such as Brazil and the United States—where soybean oil is widely used—could drive additional demand for palm oil as a substitute.
“A weaker ringgit could also support palm oil demand,” he said. “Moreover, extreme weather events affecting global soybean oil production could trigger stronger demand for palm oil.” (P2)
