Malaysian palm oil price jumps after conflict in the Middle East
1 RM (Malaysian Ringgit) = 0.25 USD*
1 USD = 0.75 GBP
*Note, exchange rates are for March 13, 2026
The Malaysia Crude Palm Oil settlement price has risen sharply over the first half of March in response to the conflict in the Middle East. Before the US and Israeli action against Iran and its subsequent retaliation, prices had been hovering at about RM4,000/tonne (US$1,000), but they jumped by RM100 between the 27th of February and the 2nd of March. The increase follows a rapid rise in the crude oil price, with vegetable oils in demand for petrochemical alternatives such as biodiesel.
By the 13th March, they were at RM4,576/tonne (US$1,144), which was 13.2% more than the price at the end of February. The intra-day price reached over RM4,600/tonne (US$1,150) at one point. The latest price was also the highest of the previous 12 months. However, it was still a long way below the RM7,104/tonne (US$2,842) seen in April 2022 in the wake of Russia’s invasion of Ukraine.
Malaysia CPO Settlement Price RM
Analysis: Crude oil price governs the world vegetable oil market
The link between palm oil and crude oil has been clear over the last few weeks, with prices rising after the start of the Middle East conflict, although crude oil values have increased at a faster rate than crude oil.
“Currently, futures are driven by the oil situation; any significant rise in oil prices and oil prices in Dalian and Chicago will react to this,” a Kuala Lumpur-based trader quoted by Ukragro Consult said.
Other vegetable oil prices have increased, too. Sunflower oil prices have risen 6.3% since the start of the conflict, with soybean prices up 5.3% and rapeseed up 4.7%.
Global palm oil prices are also being supported by the renewed rollout of Indonesian B50 blend biodiesel, which requires at least a 50% vegetable oil mix with conventional diesel. The country had delayed the switch, but the Middle Eastern conflict means the policy is back on track.
Strong Indian demand also supports Malaysian palm oil
As well as the conflict in the Middle East, Malaysian palm oil prices have been supported by exports to India. They were up 11% in February to a six-month high because of palm oil’s good value compared to sunflower oil.
An increase in the Malaysian Government’s April reference price resulted in an increase in the export duty to 9.5%, which may impact demand for Malaysian product. The rising supply of Indonesian palm oil could also increase competition in the vital Indian market.
Lower Malaysian palm oil production and exports in February drive down stocks
Malaysian crude palm oil production fell by 18.5% in February to 1.285 million tonnes, according to the Malaysian Palm Oil Board. When the shorter month is taken into account, output was down 9.8% compared to January. There were also significant declines in palm kernel production.
The drop in production contributed to a 11.7% drop in the stocks of palm oil to 1.477 million tonnes, despite a 22.5% decline in palm oil exports in the month to 1.128 million tonnes. Stocks of processed oil were up 7.4% to 1.227 million tonnes, with palm kernel stocks under pressure even though there were double-digit drops in the exports of palm kernel cake and oil.
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.