Palm oil price reaches five-month high
1 RM (Malaysian Ringgit) = 0.25 USD
1 USD = 0.74 GBP
*Note, exchange rates are for August 17, 2026
The Malaysian palm oil settlement price reached its highest level since March in mid-August, driven by higher crude oil prices and pressure on the supply of other vegetable oils.
By the middle of the month, the price was above RM4,700/tonne (US$1,175/t) and was at RM4,710/tonne (US$1,177/t) on the 17th of August. That was 1.7% more than the start of the month and 3.2% more than the month before. The lowest value of the month was RM4,630/tonne (US$1,157/t) on the first day of trading on 3rd of August. The latest price was still 33.7% lower than the all-time high in April 2022.
Prices expected to remain below RM5,000/t in 2026 unless El Niño intervenes
Malaysian Palm oil prices are expected to trade in a band between RM4,600 and RM5,000/tonne (US$1,150 and US$1,250/t) for the rest of this year, but El Niño could push prices higher in 2027, according to SD Guthrie, Malaysia’s largest palm oil producer.
“It's going to be a respectable year for us this year,” said group chief executive officer Mohammed Haris Mohd Arshad.
“The El Niño won't have an impact this year because we pretty much can see what prices we are locking in. However, 2027 is a whole different story. Whilst we are bullish about prices, production is going to disappoint due to the El Niño in the second half of this year. If the El Niño develops in a way we think it is going to be, generally it results in slower production in 2027, but higher prices offset that.”
The company reported a 95% increase in net profits to RM987 million in the second quarter of the year, with a 44% increase in first half profits. The best returns came from operations downstream from the plantation business, with a strong performance in its industrial development segment.
Another increase in Malaysian palm oil production and exports in July
Malaysia’s palm oil production was at its highest monthly total of the year so far in July at 1.793 million tonnes, 9.4% more than June, which in turn was the highest figure for the year. Daily, the output was 5.9% more at 57,838 tonnes a day, the figures from the Malaysian Palm Oil Board show.
Palm kernel production rose 10.7% in the month to 422,266 tonnes, with palm kernel oil and cake up by more than 10% on the month. The increase in production meant that stocks of palm oil rose 3.3% to 2.628 million tonnes, with a 0.9% increase in palm kernel oil stocks and a 10% increase in palm kernel cake.
In July, palm oil exports were at their highest monthly total since March, at 1.392 million tonnes, up 14.5% from June. Palm kernel oil and palm kernel cake fell, but oleochemical exports rose 17.8%, while biodiesel exports jumped from 4,817 tonnes in June to 28,745 tonnes in July.
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Malaysia’s larger palm oil stocks, which are at near two-year highs, mean that it may be able to benefit from a reduction in Indonesian palm oil exports as the country introduces a 40% palm-based biodiesel mandate. The country has also increased its export duty for palm oil.
“However, palm oil has to compete hard with South American and Black Sea soyabean oil, which have had very good crop yields this season,” said Anilkumar Bagani, research head of Mumbai-based vegetable oil broker Sunvin Group.
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Disclaimer: The information in this document has been obtained from or based upon sources believed to be reliable and accurate at the time of writing. The document should be for information purposes only and is not guaranteed to be accurate or complete.