The palm oil market is currently oscillating within a tight range, reflecting a delicate balance between supply recovery and tepid demand growth. As of mid-June 2025, the MDEX palm oil futures (Malaysian Ringgit per tonne) indicate only modest day-to-day movement, with most active contracts trading between 3,838 and 3,883 MYR/t. This subdued volatility points to prevailing hesitancy among buyers and sellers alike, as the global edible oils landscape is shaped by shifting production patterns, currency fluctuations, and ongoing competition from soybean and sunflower oil.
Market sentiment remains cautiously neutral. Producers and traders are closely monitoring key supply regions in Southeast Asia, where normalising weather patterns after last year’s El Niño are expected to rejuvenate yields. However, persistent concerns about sluggish demand growth from major importers—including India and China—continue to cap upside price momentum. On the macroeconomic front, currency depreciation in Malaysia and Indonesia provides a competitive edge for palm oil exporters, but global inventories are still ample, ensuring that price rallies are checked by comfortable stock levels. Weather trends and policy shifts, particularly regarding biodiesel mandates and trade tariffs, will prove decisive in the coming quarters.
📈 Prices
| Contract | Closing Price (MYR/t) | Weekly Change | Sentiment |
|---|---|---|---|
| Jun 25 | 3,846 | -0.78% | Neutral |
| Jul 25 | 3,844 | +0.05% | Stable |
| Aug 25 | 3,841 | +0.05% | Stable |
| Sep 25 | 3,838 | -0.03% | Neutral |
| Nov 25 | 3,849 | +0.08% | Slightly Positive |
| Jan 26 | 3,874 | -0.03% | Neutral |
🌍 Supply & Demand
- Production Recovery: Recent weather normalisation in Malaysia and Indonesia suggests improved yields for 2025/26. Industry estimates see output growth of 3–4% YOY.
- Demand Growth: Imports by India and China have grown moderately but face competition from alternative oils due to favourable pricing.
- Global Stocks: Ending stocks remain ample, restraining significant price gains. The USDA reports stable global inventories with marginal draws expected if demand picks up in H2 2025.
- Biodiesel Policy: Indonesia’s B35 and upcoming B40 biodiesel mandates are supportive but not enough to absorb potential surplus if export demand lags.
📊 Fundamentals
| Country | 2024/25 Production (Mt) | 2024/25 Exports (Mt) | 2024/25 Ending Stocks (Mt) |
|---|---|---|---|
| Indonesia | 48.5 | 30.0 | 2.8 |
| Malaysia | 19.1 | 16.5 | 1.7 |
| India (Import) | 0.8 | 8.7 | 1.4 |
| China (Import) | 0.7 | 6.8 | 1.2 |
Source: USDA/Oil World estimates. Mt: Million tonnes.
📆 Weather Outlook
- Southeast Asia (Malaysia/Indonesia): Weather forecasts project typical monsoon conditions, with rainfall near average for June/July. Moisture levels are favourable for palm fruit development and oil extraction yields.
- India: Early monsoon rains over Western India are timely, supporting import needs rather than increasing domestic output.
- Market Impact: If rainfall persists, yields could exceed expectations, applying downward pressure on futures. Any weather disruptions, however, could sharply tighten supply and propel prices upward.
🌏 Global Production & Stocks Comparison
| Country | Share of World Output (%) | Trend |
|---|---|---|
| Indonesia | 59 | Stable/Increasing |
| Malaysia | 23 | Slightly Rising |
| Thailand | 4 | Stable |
| Nigeria | 2 | Stable |
Top two producers, Indonesia and Malaysia, dominate exports and act as swing suppliers to global markets.
📌 Trading Outlook & Recommendations
- Hedgers: Use current price stability to lock in contracts for Q3 and Q4 if concerned about weather risk or logistics delays.
- Buyers: Maintain flexible coverage; monitor Southeast Asian weather closely for yield shocks.
- Sellers/Producers: Consider forward sales as ample global stocks cap rallies.
- Speculators: Range-bound trading expected. Watch for key breakouts if weather or policy surprises emerge.
📅 3-Day Price Forecast (MDEX)
| Date | Forecast Price (MYR/t) | Sentiment |
|---|---|---|
| 13 Jun 2025 | 3,845 | Neutral |
| 14 Jun 2025 | 3,845 | Neutral |
| 15 Jun 2025 | 3,850 | Slightly Positive |