Malaysia CPO Futures Still Under Pressure as Output Remains High, Analyst Says

According to Reuters, as published online by , veteran industry analyst Dorab Mistry said downside pressure in the CPO futures market has persisted as fund investors exit the market.

“Palm oil futures on Bursa Malaysia are under pressure. Fund investors have left the market. This weakness is likely to continue until production really falls,” Mistry said during an industry conference in Karachi, Pakistan, last Saturday.

The benchmark March palm oil contract on the Bursa Malaysia Derivatives Exchange closed at 4,043 ringgit per metric ton on Friday. The contract had previously touched its lowest level in more than six months in December.

Back in November, Mistry had projected that palm oil futures could surge to 5,500 ringgit per ton during the January–March period, driven by expectations that Indonesia might expand land seizures related to illegal plantations and accelerate its biodiesel blending policy toward B50.

However, that view has now shifted. Palm oil production has come in about 1 million tons higher than earlier estimates, lifting inventories. At the same time, demand from the biofuel sector has been disappointing—particularly from the United States, Mistry noted.

Malaysia’s palm oil inventories, in the meantime, are now estimated to reach around 3 million tons, sharply higher than previous projections of roughly 2 million tons. The jump reflects continued strong output since October.

While the price correction has made palm oil more competitive again compared to other vegetable oils such as soy and sunflower oil, Mistry said global demand has yet to show a meaningful rebound.

Looking ahead, Malaysian palm oil production is expected to decline after surpassing 20 million tons for the first time in 2025. Meanwhile, Indonesia’s land seizure policy could weigh on production in the second half of 2026, potentially tightening regional supply.