Palm oil supply shortage to persist until 2026
Malaysia’s palm oil market is expected to remain stable through 2026, with limited growth drivers and supply growth matching demand. CPO prices are forecast at RM4,300/t in 2025 and RM4,000/t in 2026. Plantation performance remains mixed, while environmental and social concerns persist amid expanding cultivation.
According to a forecast by Malaysian research firm Kenanga Research, the palm oil market is expected to remain stable in the near future without any significant growth drivers. Analysts maintain a neutral outlook for Malaysia’s plantation sector and expect the supply shortage in the global edible oil market, which began in 2025, to continue into 2026, according to Malaysian news outlet The Star.
Prices are expected to remain stable amid limited supply, despite the projected decline. The CPO price forecast is RM4,300/t in 2025 and RM4,000/t in 2026. Supply growth in 2026 is estimated to only match the trend demand growth (3-4%), preventing inventory buildup.
According to Kenanga Research, only 67% of plantation companies met or exceeded expectations in the third quarter of this year, compared to 89% in the second quarter of 2025. However, in the third quarter, 89% of planters met or exceeded the consensus forecast, compared to 78% in the second quarter of 2025.
OleoScope analysts previously noted that the mass production of palm oil in the tropics is a serious concern, primarily among environmental and human rights groups, as it significantly contributes to the deforestation of tropical forests in the countries where the crop is grown and is considered a factor in social problems due to accusations of human rights violations among producers.
As a reminder, the area under palm plantations has increased by 11% over the past 20 years and will reach 27.9 million hectares by the end of this year.
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Source : Ukr Agro Consult
