KUALA LUMPUR: Palm oil is projected to trade between 4,200 ringgit and 4,500 ringgit per metric ton in the coming weeks according to the Malaysian Palm Oil Council.
The forecast reflects a market caught between tight vegetable oil supply and soft demand from key importing regions.
Palm oil futures on the Malaysian exchange ended morning trade at 4,464 ringgit, near the top of this projected range.
Consumption of the four major vegetable oils is expected to outpace production growth in 2026, creating a modest supply deficit.
Stronger soybean oil demand in the United States and Brazil, driven by higher biodiesel mandates, will tighten global soybean oil export availability.
Indonesia’s exportable palm oil could fall below potential if its government raises the biodiesel mandate to B50.
These factors are likely to support vegetable oil prices through the remainder of 2025.
Prices will be capped by weak demand from key markets, with August exports largely unchanged from July.
Shipments to Asia-Pacific, Sub-Saharan Africa, the European Union, North Africa and the Middle East recorded month-on-month increases.
Exports to the Americas and South Asia posted marginal declines during the same period.
Global soybean production growth is expected to slow sharply to 2.5 million metric tons in 2025/26.
This represents a significant drop from the 27 million metric tons increase seen in 2024/25.
The slowdown comes as farmers in the United States and Argentina shift acreage to more profitable crops.
Although global soybean production will still exceed consumption in 2026, stock accumulation will slow significantly.
This reduced pace of stock building will lessen downward pressure on soybean prices.
Palm oil stocks are expected to peak in October before declining as production enters the low season in November. – Reuters