CPO Futures Prices Likely to Rise in August

23-Jul-2026 08:35 PM

Kuala Lumpur: The Malaysian Palm Oil Council (MPOC) anticipates that Crude Palm Oil (CPO) futures prices could rise to between 4,400 and 4,650 ringgit (approximately ₹1,04,126.88 to ₹1,10,043.18) per tonne next month (August 2026), as the market receives support from the implementation of Indonesia's B50 program starting in July. Additionally, the ongoing intense conflict between the US and Iran is expected to keep global petroleum prices high.

It is noteworthy that Indonesia—the world's leading producer and exporter of palm oil—officially launched its B50 biodiesel program on July 1. Under this initiative, the use of 50 percent palm oil has become mandatory in all biofuel production. This move is expected to significantly boost domestic demand and consumption of palm oil in Indonesia while reducing the volume of palm oil available for export.

Due to the Iran-US conflict, diesel prices surged by 30 percent during the first half of July, making diesel more expensive than palm oil and soybean oil. According to the MPOC report, an unexpected spike in palm oil prices is unlikely, as such a rise would dampen demand. Major consuming nations currently hold substantial stocks of vegetable oils. If palm oil prices rise sharply, top importers like India and China might prioritize purchasing soybean oil and sunflower oil instead.

In the near future, the supply situation for Malaysian palm oil is expected to remain comfortable. Data from the Malaysian Palm Oil Board (MPOB) indicates that CPO production was robust during the first half of the year (January–June 2026), causing palm oil inventories to rise to nearly 2.5 million tonnes by the end of June. CPO production in Malaysia rose by 8 percent in June compared to May, reaching 1.63 million tonnes, yet it remained 3 percent lower than the production in June 2025.