Palm Oil and Vegetable Oils: Bursa Malaysia CPO Daily — 2026-09-18
Bursa Malaysia crude palm oil futures retreated from a 21-month high as weak export estimates and rising inventory forecasts weighed on sentiment, despite supportive crude oil prices. Indonesia’s B50 biodiesel mandate and India’s potential import duty cuts are emerging as key demand-side drivers for the vegetable oil complex heading into the festive season.
Palm Oil and Vegetable Oils: Bursa Malaysia CPO Daily — 2026-09-18
Top developments
Palm Oil Retreats From 21-Month High on Stock Outlook
On September 17, benchmark palm oil contracts on the Bursa Malaysia Derivatives Exchange saw a slight retreat from recent peaks, closing down 0.04% at 4,996 ringgit per metric ton for December delivery. This pullback follows a two-session rally driven by higher crude oil prices, but market participants are now reacting to bearish signals regarding Malaysian stock build-ups and weaker export estimates for early September. The retreat highlights the tension between energy-linked support and fundamental oversupply concerns in the vegetable oil market.
India Considers Cutting Edible Oil Import Duties
Indian authorities are reportedly considering a reduction in import duties on edible oils, potentially by 5%, to combat rising food inflation. This move comes as India’s edible oil imports surged to an 11-month high of 1.57 million tons in August, driven by refiners building stocks ahead of the festive season. If implemented, a duty cut would likely boost demand for palm and soyoil imports, tightening global supply balances and potentially supporting CPO prices despite the recent inventory build in Malaysia.
Indonesia’s B50 Biodiesel Mandate Boosts Demand Sentiment
Indonesian palm oil futures and related equities gained traction this week following the government's push towards implementing the B50 biodiesel mandate. Reports indicate that Indonesia’s biodiesel consumption has already reached 10.7 million kiloliters under the B40 framework, with B50 implementation expected to further absorb domestic CPO supply. This policy shift is critical for the Indonesian export levy structure, as higher domestic absorption reduces the volume available for export, potentially supporting global prices and impacting the spread between Indonesian and Malaysian CPO.
Malaysia Raises October CPO Reference Price
Malaysia has increased its reference price for crude palm oil for October 2026 to 4,452.66 ringgit per ton, up from September levels. Despite the price increase, the export levy remains capped at the maximum rate of 10%. This adjustment reflects the recent strength in CPO prices and maintains the current tax burden on exporters, which is crucial for maintaining competitiveness against Indonesian exports where levies are also being adjusted based on reference prices.
Local view
InfoSAWIT (Indonesia) reports that CPO prices are projected to remain strong through 2027, with El Niño risks cited as a key supply-side support factor. Local analysts note that while short-term pressure exists due to Malaysian stock builds, the structural tightness in supply coupled with aggressive biodiesel mandates in Indonesia creates a bullish long-term outlook.
CNBC Indonesia highlights that local plantation stocks surged, with companies like BWPT rising over 13%, driven by the positive sentiment from Bursa Malaysia’s CPO prices approaching the RM4,900 mark. The local view emphasizes that higher CPO prices directly benefit Indonesian producers' margins, even as they face export levy adjustments.
Context & numbers
- Bursa Malaysia CPO Futures: November contract closed at 4,883 ringgit/ton on Sept 16; December contract at 4,996 ringgit/ton on Sept 17.
- Malaysian Inventory: August stocks rose 7.48% to 2.82 million tons, while exports fell 7.50% to 1.29 million tons.
- India Imports: August edible oil imports hit an 11-month high of 1.57 million tons; soyoil imports rose 26% to a record 628,736 tons.
- Indonesia HIP Biodiesel: September HIP for biodiesel rose to Rp15,025 per liter.
On the radar
- MPOB September Data: Watch for the upcoming release of September production and stock data from the Malaysian Palm Oil Board, which will confirm if the inventory build trend continues or stabilizes.
- India Duty Decision: Final confirmation of India's proposed 5% cut in edible oil import duties could trigger a sharp rally in CPO and soyoil futures if approved.
- GLOBOIL India Conference: Scheduled for late September, this event may provide further clarity on Malaysia-India trade volumes and policy coordination between MPOC, MPOB, and GAPKI.
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