Palm Oil Market: Prices Ease Amid Steady Supply, Eyes on Weather Risks

The palm oil market has entered a phase of price consolidation following recent declines, with most contract months on the Malaysian Derivatives Exchange (MDEX) settling slightly lower. Core price action across maturities points to a moderate downward tilt, reflecting comfortable supply expectations and subdued speculative interest. Nevertheless, lingering uncertainties—particularly about weather anomalies and seasonality effects—continue to loom over the outlook and could reintroduce volatility at short notice. In this report, we decode the current trends, dissect market drivers, and deliver actionable insights for market participants navigating this complex environment.

📈 Prices

Contract	Close (MYR/t)	Change	Change (%)	Market Sentiment
March 2026	4008	-10	-0.25%	Bearish
April 2026	4038	-8	-0.20%	Bearish
May 2026	4045	-8	-0.20%	Bearish
June 2026	4046	-7	-0.17%	Weak
July 2026	4043	-5	-0.12%	Weak
August 2026	4038	-3	-0.07%	Neutral
September 2026	4032	-5	-0.12%	Weak
October 2026	4031	-2	-0.05%	Neutral
November 2026	4027	-4	-0.10%	Weak
December 2026	4025	-4	-0.10%	Weak

 

🌍 Supply & Demand

• Fundamentals suggest ample supply, with contract months showing only modest declines, indicating a market unconcerned by immediate shortages.
• Trading volume remains steady (December 2026: 92 contracts, peak May 2026: 3,407 contracts), reflecting a balanced participation.
• No sudden surges or tightness are observable in the forward curve, signaling that inventory levels are considered sufficient in the near-term.

📊 Fundamentals

• The term structure across MDEX contracts remains closely grouped around the MYR 4,020–4,050/t range for 2026–2028, showing little sign of risk premium or expected supply disruption.
• Backwardations are minimal, and price changes remain subdued across maturities.
• Absence of sharp price swings highlights solid production forecasts and cautious demand projections from main importers (India, EU, China), although ongoing trade policy debates and margin squeezes in consumer markets are relevant background risks.

🌦️ Weather & Crop Outlook

• Neutral to slightly positive weather in Southeast Asia currently supports yield stability, but market is alert to developing El Niño/La Niña patterns that could affect plantations in Indonesia and Malaysia.
• Near-term meteorological forecasts do not indicate major anomalies, but any shift towards drought or excess rainfall could quickly impact fundamental views and pricing.

🌐 Global Production & Stocks

• Malaysia and Indonesia continue as dominant suppliers, with their 2026 output expected to cover global import needs comfortably barring weather shocks.
• India and China maintain steady purchasing pace, yet without ramping up strategic stocks, suggesting no panic buying or acute supply stress.
• European Union policies remain a wildcard for both demand structure and longer-term trade flows.

💡 Trading Outlook & Recommendations

• Prices across all forward maturities signal relative calm, but monitor closely for any weather-triggered disruptions.
• Lock-in contracts at current levels if input cost control is a strategic priority; upside appears limited short-term while downside risks remain moderate absent a weather or policy shock.
• Watch for shifts in import policy or subsidy changes in India and China as possible demand-side catalysts.
• Speculative traders: Range-bound positioning advised until a clear trend break emerges.

📆 Price Forecast (3-Day)

Date	: MDEX Palm Oil Front Month	Expected Range (MYR/t)	Sentiment
Day 1	April 2026	4,030 – 4,050	Stable/Soft
Day 2	April 2026	4,025 – 4,045	Stable
Day 3	April 2026	4,020 – 4,040	Stable

Summary: Palm oil prices remain under mild downward pressure but are fundamentally cushioned by balanced supply and demand. Weather developments in key origins require close tracking as they remain the most significant source of potential market volatility in the weeks ahead.