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Informist, Tuesday, Aug. 11, 2026

 

MUMBAI – Brokerages have raised their crude palm oil price for 2026 and 2027, citing growing supply risks from strengthening El Nino conditions, geopolitical tensions, and higher biodiesel demand in Indonesia, the Malaysian Palm Oil Board said in a report released Tuesday.

CIMB Securities expects crude palm oil prices at 4,400–4,600 ringgits (INR 102,487 to INR 107,144) per tonne in the near term, supported by tighter global edible oil supplies and stronger demand. The brokerage raised its 2026 and 2027 average CPO price forecasts by 50 ringgits per tonne each to 4,450 ringgits and 4,550 ringgits per tonne, respectively.

The brokerage said lower sunflower oil exports from the Black Sea region due to disruptions in Russian and Ukrainian cargo shipments could increase substitution demand for palm oil. Demand may also strengthen ahead of India's festival season, when the cooking oil consumption in the country mostly rises.

Analysts said stronger El Nino conditions expected from October could reduce oil palm yields and production in Southeast Asia, though the full impact on output is likely to be felt from 2027 because of the lag between adverse weather and production losses.

Public Investment Bank also maintained a constructive outlook on palm oil prices, forecasting an average CPO price of 4,400 ringgits per tonne in both 2026 and 2027. The brokerage cited Indonesia's B50 biodiesel blending mandate and lower production expectations.

The US Department of Agriculture has lowered its 2026-27 Indonesian palm oil production forecast to 47.2 million tonnes, reflecting concerns over drought-related crop stress. Indonesian palm oil inventories are projected to decline 28% on year to 3.1 million tonnes, supporting prices. However, some analysts cautioned that high inventory levels could limit further gains in palm oil prices.

TA Securities noted that Malaysia's crude palm oil stockpiles rose to 2.63 million tonnes in July, exceeding market expectations. The increase was driven by higher production and weaker domestic consumption despite an improvement in exports.

On a yearly basis, Malaysian palm oil inventories were up 24.3%, while exports rose 4.8%. Production, domestic consumption and imports fell 1.1%, 19.5% and 6.9%, respectively, the brokerage said.

TA Securities retained its 2026 CPO price assumption at 4,300 ringgits per tonne, citing the possibility that elevated inventories could cap further upside in prices. End

 

Reported by Khushi Singh

Edited by Akul Nishant Akhoury

 

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