Palm oil prices rose for the third consecutive session, reaching 4,122 ringgit per ton.

Palm oil futures prices on the Bursa Malaysia exchange maintained their upward momentum on February 11th, marking the third consecutive day of gains. This development followed the release of monthly data by the Malaysian Palm Oil Board (MPOB), which indicated a tightening of inventory levels.

Price movements on international exchanges

The FCPOc3 palm oil contract for April 2026 delivery on the Bursa Malaysia exchange opened the session with a gain of 9 ringgit (equivalent to 0.22%), reaching 4,104 ringgit (US$1,046.14) per ton. By the midday break, the gains had extended by another 27 ringgit, or 0.66%, closing at 4,122 ringgit (US$1,050.46) per ton.

In the relevant markets, the trends were somewhat divergent. On the Dalian exchange, soybean oil DBYcv1 prices fell slightly by 0.02%, while palm oil DCPcv1 prices dropped by 0.54%. On the Chicago exchange, soybean oil BOc2 prices also recorded a decrease of 0.17%. Technical analyst Wang Tao from Reuters believes that palm oil prices are likely to stabilize in the 4,063-4,083 ringgit/tonne range before establishing a new recovery trend.

Pressure from inventory and exchange rate fluctuations.

Data from MPOB shows that Malaysian palm oil inventories fell by 7.72% in January. This marks the first decline in 11 months, primarily due to a sharp increase in exports while production entered a seasonal low (the lowest level in 10 months). However, data from independent testing firms indicates a slowdown in early February: AmSpec Agri Malaysia reported a 14.3% drop in exports, while Intertek Testing Services estimated a 10.5% decrease.

Notably, the Malaysian ringgit had fallen 0.08% against the US dollar by midday. The weakening of the domestic currency has made palm oil more attractive in terms of price for international importers. Experts predict demand from the two largest consuming markets, India and China, will increase from January to April this year.

Challenges related to crop productivity and acreage.

The Malaysian palm oil industry is facing long-term challenges related to crop structure. MPOB Chairman Carl Bek-Nielsen warned that approximately 35% of the country's palm acreage will reach 19 years of age or older by 2027, significantly reducing productivity. Furthermore, around 800,000 hectares have been infected with Ganoderma fungus, directly impacting crude palm oil production.

In response, the Malaysian government has allocated 20 million ringgit by 2026 to promote automation and mechanization. The goal is to increase total production to 26 million tonnes by 2035 by using high-yielding crop varieties, raising the average crude oil yield per hectare from 3.5 tonnes to 4.5 tonnes.

Market outlook for 2026

In Indonesia, the world's largest palm oil producer, the postponement of the implementation of the B50 biofuel regulation (a blend of 50% biodiesel from palm oil) due to technical and capital concerns is seen as a factor putting downward pressure on global market prices. Despite this, Indonesia maintains the mandatory use of B40.

Forecasts for 2026 indicate palm oil production in Indonesia is estimated at 48.8 million tonnes, while Malaysia is projected to reach 19.7 million tonnes. Crude palm oil (CPO) prices are expected to fluctuate between 3,900 and 4,000 ringgit per tonne this year. According to Oil World, global edible oil consumption in the 2025/26 season could rise to 7.1 million tonnes, reflecting stable demand despite supply fluctuations from major producing countries.