CPO Prices To Remain Elevated On Biodiesel Mandate, Higher Oil Prices -- CIMB Securities

KUALA LUMPUR, April 10 (Bernama) -- Crude palm oil (CPO) prices are expected to remain elevated, supported by biodiesel mandates, higher oil prices, and weather-related supply risks, said CIMB Securities Sdn Bhd.

It said the escalating West Asia conflict since Feb 28 has driven energy prices sharply higher, with the price of ICE (Intercontinental Exchange) gasoil rising 71 per cent to US$1,246 per tonne and Brent crude surging 33 per cent to US$96 per barrel following the closure of the Strait of Hormuz (US$1=RM3.97).

This, coupled with Indonesia’s plan to implement the B50 mandate starting July 1, 2026, and the recently announced higher US biofuel requirements, is bullish for edible oil demand, it said in a note.

Despite that, the firm raised key concerns about the availability of feedstock to meet both food and biodiesel demand, given weather risks (62 per cent probability of an El Nino event between June and Aug 2026) and rising fertiliser prices. 

CIMB Securities also said elevated palm oil prices are likely to lead to demand rationing for food consumption, which may cap the upside. 

“Our CPO price forecasts of RM4,400 per tonne for 2026 and RM4,500 per tonne for 2027 incorporate the impact of Indonesia’s B50 mandate,” said the company.

In March 2026, the average CPO price traded at a premium to major competing edible oils, at US$140 per tonne and US$143 per tonne above the price of soybean oil and rapeseed oil, respectively, it said.

Meanwhile, it said the average CPO price traded at a US$6 per tonne discount to sunflower oil prices.

Apart from that, the firm projected palm oil stocks to fall one per cent month-on-month to 2.24 million tonnes in April 2026.

-- BERNAMA