PALMOILMAGAZINE, KUALA LUMPUR — The Malaysian government projects that the average price of crude palm oil (CPO) in 2026 will range between RM 3,900 and RM 4,100 (approximately US$925–970) per ton, lower than this year’s average. The forecast reflects expectations of higher global production and growing supplies of competing vegetable oils such as soybean and sunflower oil.
According to the Economic Outlook 2026 report released alongside the 2026 National Budget on Friday (October 10), Malaysia’s palm oil sub-sector is expected to record higher CPO output next year, driven by stronger fresh fruit bunch (FFB) yields and improved oil extraction rates (OER).
On Tuesday (October 14), the benchmark December 2025 CPO futures contract on the Malaysia Derivatives Exchange slipped RM 18 per ton, or 0.4%, to RM 4,481 (US$1,061.09) at midday—marking the second consecutive session of declines.
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Citing a report by Reuters on Thursday, October 16, 2025), the government noted that favorable weather conditions and the expansion of matured plantation areas are expected to boost output. Meanwhile, improvements in harvesting practices and wider adoption of mechanization technologies are anticipated to enhance efficiency and reduce yield losses.
“The rise in OER—driven by more frequent harvesting and better plantation management—will improve fruit quality and minimize potential losses,” the report stated.
These factors are expected to support growth in Malaysia’s palm oil sub-sector throughout 2026.
In addition, Malaysia’s agricultural exports are projected to grow 3.3% next year, supported by competitive pricing and sustained global demand for palm oil and its derivatives.
With positive prospects for both production and exports, the government remains confident that the palm oil sub-sector will continue to be a key pillar of Malaysia’s agricultural economy, despite facing challenges from global price volatility and competition from other vegetable oils. (P2)
