Palm oil prices stabilize and volume increases, China and India demand rebound can be expected

Malaysian Palm Oil Council (MPOC) said on Tuesday, driven by the price advantage, China and India are expected to significantly increase palm oil imports in May to June. The current palm oil price of 3,900 ringgit per ton (about 889 U.S. dollars), compared with other vegetable oils are more cost-effective, the attractiveness of a significant increase.

MPOC pointed out that as China enters the summer palm oil consumption season, is expected to step up replenishment; at the same time, India may also take advantage of the current relatively low prices to rebuild inventories, because of its market palm oil and soybean oil price differential has narrowed significantly.

Despite a slight recovery in March, MPOC expects 2025 annual production may decline slightly to about 19 million tons, mainly due to the first quarter of the cumulative production hit a three-year low, the production trend may continue to September. The decline in production in Sabah was particularly significant, down 10% year-on-year to the lowest level in five years.

The report pointed out that although inventories will gradually rise from April onwards, the rate of growth will be relatively moderate due to the lack of production increase, and the production gap in Sabah may form a certain support for prices, which will help stabilize the market in the short term.