Market snapshot

Malaysian benchmark crude palm oil traded around $1,158 per tonne, or RM4,684 at 4.04 ringgit per dollar, up 1.2% from the previous session. That puts it above the World Bank global palm benchmark of about $1,101 and Indonesia’s export reference of about $997, a gap that partly reflects Indonesia’s higher export levies and duties. Brent crude slipped 0.5% to about $93/bbl, keeping biodiesel blend math relevant.

Supply and demand

MPOB July data show Malaysian CPO production rising 9.4% month on month to 1,792,979 tonnes, while closing stocks reached 1,429,316 tonnes, up 7.2%. Exports grew 14.5% to 1,392,178 tonnes, absorbing much of the extra output. Imports fell 51.9% to 49,566 tonnes. The stocks-to-use ratio sits at 12.5%, and the FFB reference price rose 1.2% to RM49.50. El Niño conditions with an ONI of +1.4 and dryness in Sarawak and Kalimantan are a watch item for forward supply, even as peak production season continues.

Indonesian export levy receipts are projected to reach Rp41.22 trillion this year, with B50 biodiesel acceleration cited as a demand driver. The B50 transition and related downstream investment continue to make headlines, while Indonesia and Malaysia are fighting over palm oil pricing benchmarks. India’s festival-season buying is reported as active, and the wide soy-palm spread remains supportive for palm’s share of edible oil demand. Futures just finished higher for a fifth straight session, and local reports expect the bullish tone to continue; some analysts see prices staying above RM4,600 into September. BMI lifted its 2026 average CPO forecast to RM4,453 on tight supply.

Our model outlook

Our model outlook shows CPO has surged to $1,160/MT or MYR4,685, up 4.6% over seven days and near the top of its 52-week range. Support comes from the wide soy-palm spread, high Indonesian export levies and duties, and biodiesel demand optimism. However, RSI at 78 and price above the upper Bollinger Band signal overbought conditions, while July MPOB stocks are ample and peak production season is underway. We expect the next seven days to consolidate with a modest pullback as profit-taking and September softness offset bullish headlines; our published path is -0.0% over seven sessions.

For buyers

For buyers, the key is to watch whether the benchmark holds near RM4,684/$1,158 or gives back some of the recent gain. Overbought technicals and rising Malaysian stocks argue for patience, but export demand, biodiesel policy support, and El Niño dryness could keep floors firm. Track September export data, Indonesian levy and B50 announcements, and rainfall in Sarawak and Kalimantan.