InfoSAWIT, KUALA LUMPUR - The price of crude palm oil (CPO) is expected to remain stable in 2025, averaging between RM4,000 and RM4,300 per ton. This projection follows a positive trend with an average price of RM4,179.50 per ton in 2024 and RM3,809.50 per ton in 2023. The highest price recorded in 2024 was in December, with a monthly average reaching RM5,119.50 per ton and a daily peak of RM5,333.50 per ton on December 6.
On Tuesday (January 14), the third-month futures contract was traded at RM4,496, reflecting market optimism regarding the palm oil industry's prospects this year.
One factor predicted to influence CPO prices is the implementation of the B40 biodiesel mandate in Indonesia. This policy, initially scheduled to take effect on January 1, 2025, has been delayed due to infrastructure adjustments and technical considerations. However, once implemented, it is expected to significantly reduce the availability of palm oil for export, tightening global supply.
"This will exert upward pressure on prices," stated Datuk Dr. Ahmad Parveez Ghulam Kadir, Director-General of the Malaysian Palm Oil Board (MPOB), as quoted by InfoSAWIT from Theedgemalaysia on Sunday (January 19, 2025).
Additionally, increasing biodiesel demand in the United States and a shift in agricultural land allocation towards corn rather than soybeans could exacerbate the tight supply of vegetable oils globally.
Malaysia is projected to see a slight increase in CPO production, from 19.34 million tons in 2024 to 19.5 million tons in 2025. Palm oil exports are also expected to rise from 16.9 million tons to 17.3 million tons during the same period.
Despite the increase in production, palm oil stocks are projected to decline from 1.7 million tons to 1.6 million tons, with total inventories remaining below two million tons throughout 2025. This trend is believed to continue supporting price stability in the global market.
With these dynamics, 2025 is viewed as a promising year for the palm oil industry, underscoring the importance of strategic policies to maintain a balance between production, demand, and sustainability in the industry. (T2)