InfoSAWIT, KUALA LUMPUR - The Malaysian Palm Oil Board (MPOB) anticipates a promising year for the palm oil industry in 2025. Tight global supply and strong demand are expected to maintain the stability of crude palm oil (CPO) prices.
“With low initial stocks of palm oil and strong prices as a foundation, 2025 is projected to be a financially promising year for the industry. This projection reflects positive performance for the year,” stated MPOB Director-General Datuk Dr. Ahmad Parveez Ghulam Kadir, as quoted by InfoSAWIT from Theedgemalaysia on Wednesday (January 15, 2025).
CPO prices are expected to average between RM4,000 and RM4,300 per ton in 2025, following an average of RM4,179.50 per ton in 2024 and RM3,809.50 per ton in 2023. The highest monthly average price in 2024 was RM5,119.50 per ton in December, with the highest daily price reaching RM5,333.50 per ton on December 6. On Tuesday, the third-month futures contract was traded at RM4,496.
The B40 biodiesel mandate in Indonesia, initially scheduled to take effect on January 1, 2025, has been delayed due to infrastructure adjustments and technical considerations. Once implemented, this mandate is expected to significantly reduce the availability of palm oil for export, tightening global supply. “This will exert upward pressure on prices,” said Ahmad Parveez.
Additionally, increased biodiesel demand in the United States and changes in agricultural production patterns there, with more land allocated for corn rather than soybeans, could exacerbate the global vegetable oil supply shortage.
MPOB forecasts that Malaysia's CPO production will slightly increase from 19.34 million tons in 2024 to 19.5 million tons in 2025. Palm oil exports are expected to rise from 16.9 million tons in 2024 to 17.3 million tons in 2025, with stocks projected to decrease from 1.7 million tons to 1.6 million tons. Palm oil inventories are expected to remain below two million tons throughout the year, which will continue to support price stability.
MPOB reaffirms its focus on balancing environmental sustainability, economic stability, and social responsibility within the palm oil sector. “The ministry and agencies will continue to work closely to address environmental issues while promoting economic and social stability, ensuring a sustainable and balanced future for the industry,” emphasized Ahmad Parveez. (T2)