Palm Oil Forecast Holds Above 4,700 Ringgit per Tonne Through End of 2026

Malaysian palm oil futures experienced volatility in the third week of September 2026, with the benchmark December delivery contract falling to a multi-week low of 4,810 ringgit per tonne on September 22. This represented a decrease of approximately 0.97 percent and marked the weakest level since August 14.

The Malaysian Palm Oil Council, however, issued a more robust forecast, projecting crude palm oil prices to remain above 4,700 ringgit per tonne through the end of the year. The council cited factors including dry weather conditions in Malaysia and Indonesia, improved biofuel blending margins, and shipping disruptions as reasons for a firm outlook.

The immediate market picture presented challenges, with Malaysian ending stocks reaching an eight-month high in August. Production climbed to its highest level since December, while exports declined during the same period. Cargo surveyors reported a significant drop in Malaysian palm oil shipments between September 1 to 20, down 12.8 to 24.7 percent from the previous month.

Traders anticipate that the build-up in inventories could push Malaysian ending stocks above the 3 million tonne mark, potentially approaching record levels. The price movements were also influenced by broader vegetable oil market trends and crude oil prices.