Malaysian palm oil prices start 2026 on a weak note
1 RM (Malaysian Ringgit) = 0.25 USD*
1 USD = 0.75 GBP
*Note, exchange rates are for January 15, 2026
The Malaysia Crude Palm Oil settlement price has been under pressure during the first half of the first month of the year. The price was at RM3,993/tonne (US$998) on the 15th January, dipping below the RM4,000 benchmark (US$1,000) for the first time in six days. The price has traded in a range of RM3,981/tonne (US$995) to RM4,083/tonne (US$1,021)in the first half of the month. The mid-month price of RM3,993/tonne (US$988) was 0.4% more than the month before, 8.2% less than the year before and 43.7% less than the all-time high in April 2022.
Malaysia CPO Settlement Price RM
Analysis: Lower veg oil values, Indonesian rollback and strong exports hold back Malaysian palm oil prices
Malaysian oil prices fell in the middle of January as they followed down Chinese vegetable oil prices and Chicago soy oil prices. The Chinese Dalian exchange saw palm oil prices fall by 2.0% on Thursday, 15th January, following a 1.0% drop for soy oil in Chicago the day before.
Indonesia’s scrapping of plans to introduce B50 grade palm-oil-based diesel this year and stick with lower content B40 grade also weighed on the market, as did strong exports of Malaysian palm oil in the first half of the month. Cargo surveyors estimated that shipments were as much as 18.6% higher between the 1st and 15th of January as in the same period in December 2025.
Indonesia drops plans to introduce 50% biodiesel in 2026
Indonesia has dropped plans to require a 50% palm oil blend in diesel because of funding and technical issues. However, a 40% requirement remains.
The plan was to launch a mandatory B50 palm oil/conventional diesel blend in the second half of the year to reduce the company’s reliance on imported fossil fuel. Because Indonesia is the largest palm oil producer in the world and has a population of 285 million, which is growing at more than 1% a year, the extra requirement for palm oil could have impacted domestic and global markets. Use of B50 fuel could have added a 2.2 million tonne requirement a year to the existing usage of 11.4 million tonnes.
“This year, it will stay at B40,” Deputy Energy and Mineral Resources Minister Yuliot Tanjung said after the government announcement to scrap B50 plans. “There will be an increase of diesel production from Balikpapan refinery, so B40 is sufficient.”
Commodity research head at Sunvin Group, Anilkumar Baganitold told Reuters:
“Indonesia scrapping its B50 plan for 2026 is bearish for palm oil prices as the market was expecting more absorption of CPO for the additional blend. The price buffer due to the B50-related hopes shall start to ease now and palm oil will be seen at discount against competing oils due to higher carryover, especially at Malaysia.”
Malaysian palm oil production down in December but stocks rise
December 2025 Malaysian palm oil production was at 1.830 million tonnes, according to the Malaysian Palm Oil Board, which was 5.4% less than in November 2025 and 23.0% more than December 2024. Palm kernel production was 1.8% lower in the month at 434,539 tonnes, with palm kernel oil output up 1.0% to 209,856 tonnes and palm kernel cake up 2.0% to 229,985 tonnes.
Stocks of palm oil at the end of December were at 3.051 million tonnes, 7.5% more than the month before and 78.5% up on the year before. Stocks of pam kernel rose 42.6% in the year to 128,651 tonnes, with palm kernel oil stocks 20.4% higher at 329,764 tonnes and palm kernel cake stocks 1.4% higher at 249,493 tonnes.
Exports of palm oil were at 1.316 million tonnes in December, 8.5% more than November but down 1.9% on December 2024. Palm kernel oil, cake and oleochemical exports were all higher in December than November and also higher than December 2024, but there was a drop in biodiesel exports.
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.