Experts predict a decline in palm oil prices in 2026

According to the average estimate of 10 analysts, traders and government officials surveyed by Platts (S&P Global Energy), in 2026, crude palm oil futures on the Malaysian Commodity Exchange will average 4,200 ringgit/t or $1,037.4/t (compared to the average price in 2025 of 4,236.7 ringgit/t, 2024 of 4,000 ringgit/t and 2023 of 3,800 ringgit/t).

 

Then, if the biofuel mandate in Indonesia is increased from B40 to B50, demand and prices could increase.

 

The price decline will be facilitated by good weather, the restoration of yields, and the gradual normalization of global production, which will reduce the supply deficit recorded at the beginning of 2025, experts from the Malaysian company MARC Ratings will report in their annual report.

 

Recall that the share of Malaysia and Indonesia in global palm oil production is 85%.

 

According to forecasts by the Malaysian Palm Oil Council (MPOC), palm oil prices in January will fluctuate between 3,800-4,100 ringgit/tonne, as production in the first quarter seasonally decreases and demand increases ahead of the Chinese New Year and Ramadan.

 

During the first week of 2025, February palm oil futures were trading at 4,043 ringgit/t or $995/t.

 

However, the weakening of the energy market against the backdrop of significant global oilseed stocks will limit the recovery in prices, especially since oil prices will remain low due to a supply surplus, the MROS believes.

 

According to Platts, in the physical markets of producing countries, the average price of crude palm oil in 2025 was $1,090/t FOB Indonesia, which exceeded the price of its closest competitor, Argentine soybean oil ($1,052/t FOB), but was inferior to the price of Ukrainian sunflower oil ($1,173/t FOB).

 

Low palm oil prices and increased supply of soybean oil from South America and rapeseed oil in the EU and Canada will put strong pressure on sunflower oil prices in the first quarter of 2026.