CPO price premium over rivals is turning Malaysian palm oil’s key buyers to competing oils

High prices of crude palm oil (CPO) are leading to reduced demand from key buyers such as India, the European Union, and China, resulting in the lowest exports since February 2024. This is due to elevated CPO prices and the lowest palm oil stock levels since March 2022, caused by weak output and higher domestic consumption. The market is monitoring potential impacts on soybean prices from negotiations between China and the US. Analysts predict CPO prices will average between RM3,800 per MT and RM4,200 per MT in 2025, with potential declines in the latter half of the year. Hap Seng Plantations Holdings Bhd and IOI Corp Bhd are among the top picks for the sector.

Crude palm oil’s (CPO) continued premium over rival oils, such as soybean, is turning away Malaysian palm oil’s key buyers — India, the European Union and China — according to Gleanuk Economics. It said in a note on Tuesday, after palm oil stock data release, that exports were the lowest since February 2024, as elevated CPO prices, which averaged RM4,700 per metric ton (MT) year-to-date, led to sharply reduced demand from key buyers. Gleanuk said palm oil stock levels of 1.51 million tonnes in February 2025 were the lowest since March 2022, due to weak output and higher domestic consumption. It said this was widely expected, as palm oil mill effluent (POME) oil exports escalated in February, due to Indonesian’s export ban on “waste” oils. TA Securities in a separate note concurred, adding that the usual restocking activity ahead of Ramadan had been slower than anticipated, suggesting that Indian buyers may be turning to more affordable alternative oils instead of palm oil. It ...