CPO prices likely to soften in Q2 amid rising production

15-Apr-2025 08:06 PM

Kuala Lumpur. Crude palm oil (CPO) prices are expected to see some softening during the April-June 2025 quarter, according to CGS International Research.

The forecast is based on signs of increased supply and rising production of rival edible oils, which could put downward pressure on prices.

As per the Malaysian Palm Oil Board (MPOB), Malaysia’s palm oil stock rose by about 4% in March, despite strong domestic demand. This indicates that CPO production exceeded expectations.

In March, production jumped 16.8% month-on-month to 13.90 lakh tonnes, boosted by pre-Hari Raya processing activity.

Analysts say if production continues to rise in April, palm oil availability will improve further, creating room for a price correction. Uncertainty due to U.S. tariff policies is also clouding the global edible oil market.

However, favorable weather is expected to improve oil recovery rates from oil palm, further strengthening supply. The research firm estimates CPO prices may average around 4000 ringgit per tonne this year.