MPOC Expects CPO Price Within RM4100-RM4300 Supported By Strong Soy Oil Market
The Malaysian Palm Oil Council noted that in the first half of 2025, Kenya ranked as Malaysia's second-largest palm oil buyer, overtaking the EU27 by 21,000 MT and China by 117,000 MT. Kenya accounted for 30% of Malaysia's total palm oil exports to Sub-Saharan Africa, with full-year imports projected to reach 1.3 million MT from Malaysia. Kenya continues to stand out as a key growth market, underpinned by its rising consumption. Over 90% of Kenya's palm oil imports are consumed domestically for food purposes.
Global vegetable oil prices have recovered from early-year losses, led by a sharp rebound in soybean oil, which has risen 19% since January. This outpaced gains in rapeseed oil (+6.6%) and palm oil (+3.7%), while sunflower oil remained relatively stable with a modest 1.7% increase. Soybean oil remains the top performing vegetable oil year-to-date, supported by the U.S. biofuel policy announced in mid-June, which is expected to spur demand for domestically produced feedstocks.
Strong soybean oil prices have improved the price competitiveness of palm oil. As a result, Malaysian palm oil exports to India have rebounded significantly since April, narrowing the cumulative decline recorded in Q1 2025. India's monthly imports of Malaysian palm oil remained consistently above 250,000 MT in both May and June. MPOC noted that this positive momentum is expected to extend into Q3, supported by restocking ahead of the Diwali festival in mid-October and favourable prices. In the third quarter, India is projected to import around 2.9 million MT of palm oil to meet festive season demand. This firm buying interest will continue to support palm oil prices. In the U.S., soybean oil prices are expected to remain elevated through the remainder of 2025 and into 2026. According to the latest USDA projections, soybean oil use for biodiesel in U.S. is forecast to rise by 17%, from 6 million MT in 2024 to 7 million MT in 2026. For the first time, more than 50% of US soybean oil production is expected to be directed into biodiesel.
In the U.S., soybean oil prices are expected to remain elevated through the remainder of 2025 and into 2026. According to the latest USDA projections, soybean oil use for biodiesel in U.S. is forecast to rise by 17%, from 6 million MT in 2024 to 7 million MT in 2026. For the first time, more than 50% of US soybean oil production is expected to be directed into biodiesel.
Additionally, under the revised U.S. tax credit framework, only feedstocks sourced from North America (Canada and Mexico) qualify for the tax credit, with U.S. produced feedstocks receiving the highest incentive. This restriction is expected to keep U.S. soybean oil and Canadian canola oil prices at a premium relative to other vegetable oils globally. These policy-driven dynamics will continue to support positive sentiment across the vegetable oil market.
However, MPOC added that the rising U.S. demand alone is insufficient to offset the anticipated surge in global soybean supply. South American soybean production is forecast to increase by 8 million MT in 2026, reaching 245 million MT. The ample supply is expected to weigh on soybean prices, with U.S. soybean inventories in 2026 projected to double from 2023 levels due to high carry-over stocks and a steep decline in exports to China.
Looking ahead, MPOC expect CPO prices to remain firm and trade between RM 4,100 to RM 4,300 over the next month, supported by firm festive demand from India and elevated U.S. soybean oil prices. However, any rally in vegetable oil prices may be capped by abundant global oilseed supply, particularly soybeans, as there is currently no shortage of oilseeds in the market.
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