KUALA LUMPUR (Oct 31): BMI, a unit of Fitch Solutions, has raised its 2025 average price forecast for Bursa Malaysia’s front-month crude palm oil (CPO) contract to RM4,320/tonne from the previous RM4,150/tonne.
In its latest outlook, BMI said the upward revision reflected stronger-than-expected import demand from India, the world’s largest palm oil buyer, which supported prices throughout the third quarter.
As of Oct 27, front-month CPO contracts settled at RM4,335/tonne, bringing the year-to-date average to RM4,332/tonne.
BMI reported that Indian palm oil imports surged 43% quarter-on-quarter in the third quarter, capturing 56.9% of India’s edible oil imports, up from 52.4% in the previous quarter.
The increase was driven by palm oil’s favourable pricing compared to soybean and sunflower oil. However, BMI cautioned that the price gap with soy oil had narrowed since August, which could slow imports in the coming months as soybean oil becomes more competitive.
The report added that while Indian demand may ease after the festive season, palm oil remains competitively priced and is still expected to hold a significant share of the edible oil market.
BMI said the country’s consumption would likely stay strong in the 2025/26 season, supported by low domestic stockpiles and a projected 11.5% rise in imports.
Globally, BMI expects palm oil production to increase 1.8% to 80.1 million tonnes in the 2025/26 season, led by a 3.3% rise in Indonesia’s output to 47.5 million tonnes. Global consumption is projected to grow 2.5% to 78.5 million tonnes, narrowing the surplus to 1.6 million tonnes, compared with 2.1 million tonnes in the previous cycle.
In Malaysia, production is forecasted to rise 0.5% to 19.5 million tonnes, with output expected to peak in October before easing seasonally through year end.
BMI said strong production and moderating demand would likely keep Malaysian stockpiles elevated through early 2026.
Looking ahead, BMI forecasts a slight easing in prices in 2026 to RM4,300/tonne, as near-term supply pressures ease but long-term structural constraints continue to support elevated prices.
The firm noted that slower yield-growth, limited land expansion, and rising sustainability standards in major producing countries will keep the global market tight over the next few years.
