BMI maintains average annual CPO futures price at RM4,150 per tonne this year
Fitch unit BMI maintained its 2025 crude palm oil (CPO) price forecast at RM4,150/tonne, expecting prices to range between RM3,800–RM4,000 for the rest of the year. Despite Q2 price drops, June saw a brief rally due to geopolitical tensions and biofuel policy shifts. Malaysian output is gradually recovering.
KUALA LUMPUR (July 2): BMI, a Fitch Solutions unit, has maintained its view that the average annual price forecast for Bursa Malaysia-listed crude palm oil (CPO) futures contracts will trade at RM4,150 a tonne in 2025.
In a note on Wednesday, BMI said that as of the market’s closure on June 27, front-month CPO contracts settled at RM3,986 per tonne, bringing the year-to-date average to RM4,360 per tonne.
“Accordingly, we expect palm oil prices to trade between RM3,800 per tonne and RM4,000 per tonne for the remainder of 2025,” it said.
Inside Maybank’s Year of Strategic Progress in Wealth Management
Strategic progress is rarely loud, but within the wealth management space, its impact is unmistakable. Over the past year, Maybank Group Wealth Management (GWM) has strengthened its position as a leading force across ASEAN, delivering a series of milestones that reflect both depth and direction.
BMI said palm oil prices came under significant pressure throughout the second quarter (2Q2025), declining by 17.7% in the quarter-to-date, driven by weaker global crude prices, improved Malaysian output, and subdued demand.
However, it said the market found some “support” in June following a brief rally, sparked by both geopolitical and policy developments.
“Prices rose by around 6% between June 12 and June 16 initially, as global crude oil prices surged in the wake of the Israel-Iran conflict.
“This rally was further reinforced by the United States Environmental Protection Agency’s (EPA) announcement of sharply higher proposed biofuel blending targets for 2026 and 2027, with the 2026 target representing a 67.5% year-on-year (y-o-y) increase,” it said.
While these proposals primarily buoyed soyoil, the resulting strength in the broader edible oils complex also benefitted palm oil prices, it added.
Meanwhile, BMI expects Malaysian palm oil output to reach 19.5 million tonnes in the 2025/2026 season, representing a y-o-y increase of 0.5%.
“In our 1Q2025 price forecast update, we highlighted that ongoing production challenges in Malaysia were providing support to palm oil prices, as data from the Malaysian Palm Oil Board (MPOB) indicated a 5.9% y-o-y reduction in crude palm oil output during 1Q2025.
“However, we also anticipated that Malaysian crude palm oil production would recover over the coming months,” it said, adding that this expectation has been validated as of the latest available monthly data (May 2025), with cumulative output in April and May this year totalling 3.5 million tonnes, a y-o-y increase of 7.8%.
BMI said this recovery has helped alleviate some of the recent tightness in the global market, exerting downward pressure on prices.
To Read more about Edible Oil News continue reading Agriinsite.com
Source : The Edge Malaysia
