Malaysia CPO futures drop RM35 to RM4,629, hit lowest level in 8 weeks

BURSA MALAYSIA DERIVATIVES, DALIAN COMMODITY EXCHANGE, CHICAGO BOARD OF TRADE (CBOT), ROTTERDAM MARKET, PT KHARISMA PEMASARAN BERSAMA NUSANTARA (KPBN), 30 SEPTEMBER 2026 —

Malaysian crude palm oil (CPO) futures extended their downward trajectory on Tuesday, September 29, 2026, as the benchmark December contract slid to its lowest level in eight weeks.

The decline marked the third consecutive session of losses for the commodity, driven by a combination of weaker rival vegetable oils and growing market expectations for rising Malaysian inventories.

According to data from Bursa Malaysia Derivatives, the December 2026 CPO contract fell RM35 per metric ton, a drop of approximately 0.75%, to close at RM4,629 per ton by the midday trading break. This price point translates to approximately US$1,134.56 per ton, based on the exchange rate cited in the report.

The sustained pressure on Malaysian CPO prices reflects a broader reassessment of supply and demand dynamics in the region. Traders are increasingly focused on the prospect of higher palm oil stocks in Malaysia for September, a factor that has become a significant driver of bearish sentiment. With production remaining relatively strong and exports expected to weaken during the month, the market is grappling with the implications of ample supplies.

This environment contrasts with periods of tight supply, where price support is typically more robust. The current trajectory suggests that the balance of power has shifted toward sellers, as the market anticipates a build-up in inventories that could outpace demand in the near term.

Key to this outlook are the latest estimates from cargo surveyors, who have provided data indicating a sharp contraction in export volumes. Intertek Testing Services and AmSpec Agri Malaysia estimated that Malaysian palm oil product exports during the period of September 1 to 25, 2026, fell by between 15.1% and 24.3% compared to the corresponding period in August.

This significant decline in export activity is a critical market factor, particularly given that Malaysian palm oil supplies remain relatively ample. The combination of firm production and slowing exports creates a perfect storm for inventory accumulation, further weighing on the futures market.

The inventory situation in Malaysia has been deteriorating for several months, with stocks already reaching an eight-month high at the end of August. As production continues to hold firm and exports show signs of weakness, traders are assessing the possibility of further stock accumulation in September. Rising inventories can exert downward pressure on prices when supply growth outpaces demand, a dynamic that is currently evident in the Malaysian market.

This trend adds to the bearish pressure on the futures market, as investors and commercial participants adjust their positions in response to the changing fundamentals.

The CPO market was also influenced by movements in competing vegetable oils, which often serve as a benchmark for pricing. On the Dalian Commodity Exchange, the most-active soybean oil contract fell 0.23%, while the Dalian palm oil contract declined 1.04%. These declines in the Chinese market reflect local supply and demand conditions, which can have a spillover effect on global prices.

In contrast, soybean oil futures on the Chicago Board of Trade (CBOT) rose 0.72%, indicating mixed performance across major vegetable-oil markets. This divergence highlights the differing supply and demand expectations in various regions, with traders continuing to monitor production, exports, and inventory developments closely.

In Indonesia’s domestic market, the CPO price at PT Kharisma Pemasaran Bersama Nusantara (KPBN) was set at IDR15,050 per kilogram on Tuesday, September 29. This represented a decline of IDR25 per kilogram, or approximately 0.17%, from IDR15,075 per kilogram on Monday, September 28. The drop in the KPBN tender price underscores the broad-based pressure on palm oil prices across the region.

Both Malaysian CPO futures and the KPBN CPO tender price were under pressure during Tuesday’s trading session, reflecting the interconnected nature of the global palm oil market.

Trading in vegetable oils on the Rotterdam market was mixed on Tuesday, with varying movements across different contracts. CPO for October was quoted at 1,500, while the November contract stood at 1,520. For olein (OLE), the October contract was quoted at 1,150 and November at 1,160, down 10 points. Soybean oil (SBO) was reported down 27 points, indicating a broader weakness in the vegetable oil complex.

Crude coconut oil (CNO) for October-November was quoted at 2,020, down 30 points, while the November-December contract stood at 2,030. For palm kernel oil (PKO), the September-October contract rose five points to 2,085, while the October-November contract was quoted at 1,850. These mixed movements underline the varied pressure facing the global vegetable-oil complex, while Malaysian CPO remains weighed down by expectations of higher inventories and weaker September exports.

The recent price action in Malaysian CPO futures follows a period of volatility, with the market experiencing both gains and losses in the preceding weeks. On Monday, September 28, Malaysian CPO futures were mixed, with the KPBN CPO price rising to IDR15,075 per kilogram. Prior to that, on Thursday, September 24, the Malaysian CPO price had edged up to RM4,771 per ton as Dalian oils gained.

However, the market had seen declines in the days leading up to that, with the CPO price falling 2.07% to RM4,673 and the KPBN CPO dropping to IDR15,000 per kilogram. This pattern of volatility highlights the sensitivity of the market to changes in fundamentals, such as export data and inventory levels.

The decline in CPO prices has implications for producers and traders in the region, as lower prices can affect profitability and investment decisions. In Indonesia, the Riau FFB price fell to IDR3,885.17 per kilogram for the period of September 23–29, 2026, reflecting the downward pressure on farmgate prices.

Similarly, West Sumatra FFB prices fell to IDR3,987.27 per kilogram for September 22–30, and North Sumatra FFB prices fell for September 23–29, with the highest price at IDR3,974.88 per kilogram. These declines in FFB prices are a direct consequence of the lower CPO prices, as the value of fresh fruit bunches is linked to the price of the oil they produce.

The market’s focus on inventory levels and export trends is likely to continue in the coming weeks, as traders await further data on production and demand. The mixed performance across major vegetable-oil markets suggests that the global palm oil market is navigating a complex set of factors, with regional differences in supply and demand playing a significant role.

For Malaysian and regional readers, the current price environment underscores the importance of monitoring key indicators such as export volumes, inventory levels, and rival oil prices. The next few weeks will be critical in determining whether the downward trend in CPO prices continues or if the market finds a new equilibrium.

The most recent development, with the December contract hitting an eight-week low, signals that the bearish sentiment is likely to persist in the short term, as the market digests the impact of rising inventories and weaker exports.