Palm oil futures on the Malaysian exchange slipped marginally on April 23 but remain elevated around MYR 4,550–4,650/t, reflecting a still-tight fundamental balance despite softer export data early in April.
Prices along the MDEX curve show modest day-on-day losses across 2026 contracts, yet the overall level remains close to recent highs supported by constrained stocks, strong biofuel offtake and lingering weather risks. Export surveys for April point to a pullback in shipments versus March, especially to the Middle East and India, tempering the previous export surge. At the same time, global oilseed markets and energy prices have eased slightly, removing some of the upside momentum. With ENSO conditions moving toward neutral but El Niño risks later in 2026, the market is carefully balancing short-term demand softness against potential medium-term production threats.
📈 Prices & Curve Structure
The latest MDEX board (April 23, 2026) shows a small, uniform softening in nearby contracts:
- May 2026: MYR 4,536/t (-0.29% d/d)
- June 2026: MYR 4,591/t (-0.17% d/d)
- July 2026: MYR 4,617/t (-0.24% d/d)
- August 2026: MYR 4,630/t (-0.22% d/d)
- September 2026: MYR 4,631/t (-0.17% d/d)
The forward curve from mid-2026 into 2027/28 remains slightly backwardated, with 2027 contracts mostly in the MYR 4,500–4,535/t range and longer-dated 2028/29 strips indicated around MYR 4,441/t. This structure signals that the market still prices a relatively tighter nearby balance versus the longer term, even after two modest down sessions following earlier gains. External price references broadly confirm consolidation just below recent highs, with front-month CPO hovering in the MYR 4,450–4,500/t band after a recent rally.
| Contract | Settlement (MYR/t) | Settlement (EUR/t, approx.)* | D/d change |
|---|---|---|---|
| May 2026 | 4,536 | ~955 | -0.29% |
| June 2026 | 4,591 | ~966 | -0.17% |
| July 2026 | 4,617 | ~972 | -0.24% |
*EUR conversion assumes ~0.21 EUR/MYR and is indicative only.
🌍 Supply, Demand & Trade Flows
Malaysia’s palm oil balance remains tight but less explosive than in March. Cargo surveyors report that exports for April 1–20 are down roughly 26% from March, with notable slowdowns to the Middle East and India as buyers react to the earlier price spike and geopolitical risk premium. Despite this mid-month softness, recent analyses still project Malaysian April inventories only slightly below March levels, around 2.2–2.3 million tonnes, as domestic demand and biofuel usage absorb part of production.
Strong structural demand from biodiesel mandates continues to underpin the market. Malaysia is closely aligned with Indonesia in expanding palm-based biodiesel blending, adding an estimated 300,000 tonnes or more of annual demand and reducing the volume available for export. On the import side, India and China remain key but price-sensitive buyers; preliminary data indicate India’s purchases dipped in March–April amid high outright values and competitive soyoil offers. At the global level, USDA’s latest oilseeds report still points to only modest growth in world palm oil output in 2025/26, reinforcing a broadly balanced to slightly tight backdrop.
📊 Fundamentals & Weather Outlook
Structurally, the palm oil market is supported by constrained supply growth in Malaysia (labour and land limits) and robust policy-driven demand from renewable fuels. Export data for March showed a surge of more than 40% month-on-month and over 50% year-on-year, drawing down inventories, and this tightening continues to influence nearby pricing despite April’s export pause.
On the weather side, major climate centres expect ENSO-neutral conditions for March–May 2026 with a roughly 60–70% probability, but model guidance increasingly hints at the emergence of El Niño conditions later in 2026. A transition to El Niño typically raises the risk of drier-than-normal weather in parts of Southeast Asia, which could curb palm oil yields from late 2026 into 2027. While this is a medium-term risk rather than an immediate driver, it helps maintain a risk premium in deferred contracts and encourages plantation and industrial buyers to lock in coverage before any clear weather deterioration.
📆 Short-Term Outlook & Trading Ideas
In the very near term, the modest daily losses on April 23 suggest a market in consolidation rather than trend reversal. Weaker exports in early April, slightly softer energy and competing vegetable oils, and some profit-taking after the March rally all argue for a more range-bound price action around current levels. At the same time, limited inventory cushion, firm biodiesel demand and prospective weather risks cap the downside.
- Producers: Consider layering in incremental hedges on rallies above ~EUR 970/t (July-equivalent) to secure attractive forward margins while maintaining some open exposure to potential weather-led rallies.
- Refiners & physical buyers: Use current consolidation to extend coverage modestly into Q3 2026, focusing on dips toward ~EUR 930–950/t, given the risk of El Niño-related supply concerns later in the year.
- Speculators: The gently backwardated curve and tight fundamentals favour a buy-on-dips stance, but near-term volatility around macro and energy markets argues for tight risk limits and preference for spread strategies (e.g., long nearby vs. short deferred).
📍 3-Day Directional View (Key Contracts, in EUR terms)
- MDEX May 2026 (nearby): Expected to trade sideways to slightly firmer in a broad band equivalent to ~EUR 940–970/t, with dips cushioned by end-user buying.
- MDEX July 2026: Likely to mirror nearby moves, maintaining a small premium over later 2026 months and holding roughly ~EUR 950–980/t unless export data deteriorate further.
- Late-2026 strip (Oct–Dec): Seen stable to mildly supported, around a small discount to nearby in EUR terms, reflecting balanced fundamentals but growing attention to 2H-2026 weather risks.
