News and Articles

• Malaysian December palm oil futures fell about 0.97 percent to 4,810 ringgit per tonne on September 22
• Council forecast placed CPO above 4,700 ringgit per tonne through the rest of 2026
• Malaysian August stocks reached an eight month high as production hit a peak since December
• Cargo surveyors reported September 1 to 20 exports down 12.8 to 24.7 percent month on month
• Indonesian rainfall ran 60 percent below average in August, keeping weather risk on the table

Malaysian palm oil markets moved through a volatile third week of September 2026, with benchmark futures pulling back to a multi week low even as the industry maintained a firm outlook for the balance of the year. On September 22, the December delivery contract at the Malaysian benchmark exchange closed about 0.97 percent lower at 4,810 ringgit per tonne, the weakest reading since August 14. The decline came against a wider pullback in vegetable oil prices as traders weighed rising Malaysian inventory against continued weather worries in the main producing regions.

The Malaysian Palm Oil Council pointed to a firmer floor on the same day. Its forecast placed crude palm oil above 4,700 ringgit per tonne through October and the remainder of the year, and put 2027 Malaysian palm oil exports near 16 million tonnes. The council cited El Nino driven dry weather in Malaysia and Indonesia since early August, improved biofuel blending margins after the Saudi Arabia East West pipeline shutdown, and shipping disruption through the Strait of Hormuz and Bab al Mandab as the main reasons to expect a firm rest of year.

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The near term picture was less rosy. Malaysian ending stocks reached an eight month high in August as production climbed to its strongest level since December, while exports fell during the same month. Cargo surveyors reported Malaysian palm oil shipments between 12.8 and 24.7 percent lower in the September 1 to 20 window compared to the prior month, with weakness spread across Indian, Chinese, and Middle East destinations. Traders said stock buildup could push Malaysian ending inventory above the 3 million tonne mark and possibly toward record levels through the seasonal production peak.

Cross oil moves also shaped price direction. Chicago board soybean oil pulled lower on September 22 while Dalian soybean oil edged higher, leaving palm on the softer side of the broader vegetable oil complex. Crude oil declines linked to fresh diplomatic contact from Iran cut into the biodiesel demand argument for palm, and cautious positioning ahead of the United States and China presidential meeting kept speculative buying restrained. Weather data continued to show Indonesian rainfall about 20 percent below average in July and about 60 percent below average in August, with Malaysia running under similar dry conditions.

For procurement teams in food processing, oleochemicals, and biodiesel, the picture calls for careful position management. Refiners in India, Vietnam, and Pakistan should lock in October and November origin cover while spot values sit near multi week lows. Biofuel blenders should track ringgit and Brent moves alongside palm to spot the next narrowing of the gasoil versus palm methyl ester gap. Food ingredient buyers should stress test their fourth quarter budgets against a scenario where Malaysian inventory stays elevated and prices consolidate near 4,700 to 4,900 ringgit per tonne into the end of the year.