InfoSAWIT, KUALA LUMPUR – The price of crude palm oil (CPO) in Malaysia is expected to fluctuate between RM4,400 and RM4,600 per ton throughout March 2025. This trend is driven by increasing demand from emerging markets, such as Sub-Saharan Africa, which offsets declining purchases from major customers like India and China.
The Malaysian Palm Oil Council (MPOC) stated that despite weakening demand from traditional markets, palm oil remains a price leader in the first quarter of 2025. The shift in exports to Sub-Saharan Africa, which records an annual population growth of about 30 million people, significantly contributes to maintaining Malaysia's palm oil exports.
“This trend is expected to continue throughout the year, ensuring the stability of Malaysia's palm oil exports,” noted MPOC in an official statement quoted on Tuesday (March 18, 2025).
In the January-February 2025 period, India's palm oil imports fell to 648,000 tons, lower than soybean oil imports, which reached 727,000 tons. This decline occurred while the average price of crude palm oil reached RM4,700 per ton. Meanwhile, China only imported palm oil as needed, averaging 300,000 tons per month throughout 2024.
Intense competition with cheaper and abundant soybean oil is a primary factor in the fluctuation of CPO prices within the RM4,400 to RM4,600 per ton range in March. However, MPOC believes that despite India's shift to soybean oil, palm oil demand still has the potential to increase in the coming weeks as India needs to replenish its stocks. This could help stabilize palm oil prices in the global market.
In the long term, global vegetable oil consumption, primarily driven by biodiesel production, is projected to decline in 2025. Global biodiesel output is expected to decrease by 500,000 tons. Indonesia is the only major producer expected to continue recording growth in biodiesel production, while other regions are likely to stagnate or contract.
Monitoring the availability of exports from Malaysia and Indonesia is crucial in determining palm oil price movements. Palm oil production is expected to gradually recover starting in March after the rainy season, although market uncertainties remain high.
In February 2025, Malaysia's palm oil stocks were recorded at only 1.51 million tons, the lowest level since April 2023. Palm oil production from January to February 2025 also hit a three-year low, at just 2.42 million tons, lower than 2.66 million tons in the same period last year and 2.63 million tons in 2023.
This production decline is attributed to delayed harvesting due to heavy rainfall and palm tree fatigue following a production surge in early 2024. A recovery in annual production growth is not expected until August 2025. (T2)
