Analysts forecast CPO prices to decline after the first quarter of 2025

Analysts at Hong Leong Investment Bank Bhd (HLIB) and Maybank Investment Bank Bhd (Maybank IB) in Malaysia predict that the current high crude palm oil (CPO) prices, which have surged by over 15% since October, are not sustainable in the long term. They anticipate that demand rationing and a shift to cheaper alternative vegetable oils by major importers will narrow the price gap. Despite this, HLIB maintains its CPO price assumptions for 2025/26 at 4,000 ringgit or $889 per tonne, expecting high prices to be supported by weak production in the near term. However, they foresee a decline in prices after the first quarter of 2025, with fluctuations ranging between 3,500 to 4,500 Malaysian ringgit per tonne until the end of 2025.

Analysts at Malaysia’s Hong Leong Investment Bank Bhd (HLIB) say high crude palm oil (CPO) prices are unlikely to persist beyond the first quarter of 2025 as the price premium over other competing vegetable oils is unsustainable in the long term. According to analysts, high palm oil prices will lead to demand rationing and force major importing countries to switch to cheaper alternative vegetable oils, thereby narrowing the price gap, especially when palm oil production starts to show signs of improvement, Business Time noted. As a reminder, the CPO price has risen more than 15% since October, resulting in an average price of 4,230 ringgit $940 per ton in 2024, compared to 3,832 ringgit or $832 per ton in 2023. However, HLIB maintained its CPO price assumptions for 2025/26 at 4,000 ringgit or $889 per tonne, believing that the CPO price will remain high in the near term, supported by weak production. Sharing this view, Maybank Investment Bank Bhd (Maybank IB) said 2025 will be ...