KUALA LUMPUR (Aug 11): CPO Price, crude palm oil is expected to rise in 2H2026. Moreover, rising supply risks may offer upside to plantation stocks, analysts say.

Rising geopolitical risks and a strengthening El Niño have left analysts expecting CPO prices to trade above RM4,000 per tonne for the remainder of 2026.

CPO Price, crude palm oil outlook

Additionally, we expect CPO Price, crude palm oil to trade within RM4,400–RM4,600/tonne in the near term.

This outlook is supported by rising geopolitical risks, El Niño, and higher biodiesel demand in Indonesia, CIMB Securities said Tuesday.

Market implications for palm oil

CIMB reported that falling sunflower oil exports after Russia and Ukrainian cargo strikes could support substitution demand for palm oil.

Moreover, India’s festival season draws near and provides further upside as cooking oil use rises.

Conversely, stronger El Niño conditions beginning in October could further reduce oil palm yields and production in Southeast Asia.

However, they pose greater downside risks to supply from 2027 onward due to “time lags” in production impact.

Additionally, CIMB raised its 2026 and 2027 CPO Price, crude palm oil forecasts by RM50/tonne to RM4,450/tonne and RM4,550/tonne, respectively.

This adjustment reflects stronger El Niño conditions and geopolitical risks.

On another note, Indonesia’s B50 biodiesel mandate is expected to support CPO demand globally. Moreover, the USDA cut Indonesian palm oil production forecasts for 2026-2027 to 47.2 million tonnes due to drought expectations.

Indonesian palm oil stocks are projected to shrink 28% year-on-year to 3.1 million tonnes.

Additionally, Public Investment Bank expects an average CPO price of RM4,400 per tonne for 2026-2027.

However, concerns over high inventory levels capping further price upsides have grown, according to TA Securities.

This comes as Malaysia’s CPO stockpiles beat market expectations. Additionally, they reached a high of 2.63 million tonnes in July.

However, the inventory build was mainly due to higher production and lower domestic usage. It more than offset the export improvement, said TA Securities. TA Securities also maintained assumptions of RM4,300 per tonne for CPO in 2026.

On a year over year basis, stockpiles were 24.3% higher, while exports grew 4.8%. Additionally, production, domestic usage and imports declined by 1.1%, 19.5% and 6.9%, respectively. It added.

Moreover, for strategy, IOI Corporation Bhd (KL:IOICORP) and Kuala Lumpur Kepong Bhd (KL:KLK) were top picks by the analysts.

Additionally, Hap Seng Plantations Holdings Bhd (KL:HSPLANT) and SD Guthrie Bhd (KL:SDG) were also top picks, according to analysts.

Source : The Edge Malaysia