KUALA LUMPUR, Dec. 12 (Xinhua) -- Malaysia's crude palm oil (CPO) inventory, which surged to an 80-month high of 2.84 million tons in November, is likely to cap its near-term upside.
Maybank Investment Bank said in a recent note that the present high stockpile in Malaysia is likely to cap the upside of CPO prices in the short term.
The research house, however, noted that this bearish pressure is "somewhat mitigated" by the anticipation of seasonally weaker output in the coming months, in part aided by the heavy monsoon rain which is disrupting harvesting and evacuation activities.
Despite the near-term supply concerns, Maybank is keeping its CPO average selling price forecasts of 4,330 ringgit per ton for 2025 and 4,100 ringgit per ton for 2026.
While anticipating the average CPO prices to come in marginally higher by 3.6 percent to an average of 4,224 ringgit per ton in December (ahead of the pollination months), MBSB Research expects the prices to be range-bound in tandem with the elevated stock level.
According to the research house, the CPO outlook remains hazy amid supply and demand dynamics.
"The shortage in palm oil might be coming from a neighbor's aggressive policy such as impending B50 implementation in the second half of 2026 by the government of Indonesia. However, demand has yet to gain traction despite widened spread discount between the soybean oil, reflecting cautious sentiment," it added.
CGS International, however, expects palm oil output to ease in December, reflecting normal seasonality as production typically tapers off after the peak harvesting period.
Entering 2026, it expects Malaysia's production to contract slightly by 1 percent year-on-year, mainly due to smaller planted areas and a moderation in the biological yield cycle. ■
