Malaysia CPO price falls 2.07% to RM4,673, KPBN CPO drops to IDR15,000/Kg

BURSA MALAYSIA DERIVATIVES, 28 SEPTEMBER 2026 —

Malaysia’s benchmark crude palm oil (CPO) contract recorded its steepest weekly decline in recent weeks on Friday, September 25, 2026, as the December 2026 contract on Bursa Malaysia Derivatives dropped 2.07% to RM4,673 per metric ton.

The sharp fall, which amounted to a loss of RM99 per metric ton, pushed the closing level to its lowest point since August 3, marking the weakest finish in more than seven weeks.

This significant downturn in the regional pricing benchmark coincided with a parallel decline in Indonesia’s domestic market, where PT Kharisma Pemasaran Bersama Nusantara (KPBN) recorded a top bid of IDR15,000 per kg in a withdrawn tender, signaling broad-based selling pressure across the palm oil sector.

The decline extended losses for the week, with the benchmark contract falling 4.59% in the week ended Friday. This weekly drop reversed a 1.74% gain recorded in the previous week, indicating a sharp shift in market sentiment. Traders and analysts pointed to expectations of higher palm oil production as a primary driver of the price correction.

The prospect of increased output has raised concerns about rising inventories, which could further weigh on prices if demand does not keep pace with supply. Relatively weak export performance has added to the pressure on the supply-demand balance, exacerbating the downward trajectory of the benchmark contract.

Developments in India’s edible oil market provided another critical factor for traders to monitor during this period of volatility. On Wednesday, September 23, the Indian government announced a cut to the basic import duty on crude and refined edible oils, including palm, soybean, and sunflower oil. The measure was introduced to help contain domestic cooking oil prices as demand rises during the country’s festive season.

As India is one of the world’s largest consumers and importers of edible oils, changes to its import policy are relevant to global vegetable oil markets. However, the immediate impact of the lower import duties on CPO prices remains contingent on the pace of Indian import demand, movements in competing vegetable oil prices, and global palm oil supply conditions.

Domestic CPO prices in Indonesia also came under significant pressure during the KPBN tender on Friday. The tender was ultimately withdrawn, with the highest bid recorded at IDR15,000 per kg. This price represented a decline of IDR515 per kg, or 3.32%, compared to the IDR15,515 per kg recorded on Thursday, September 24.

The sharp decline in both the Bursa Malaysia futures market and Indonesia’s domestic CPO market highlights stronger selling pressure heading into the end of the week. The combination of expectations for higher production, subdued exports, and the potential for rising inventories has weighed heavily on market sentiment, while developments in major importing markets such as India remain an important factor for the near-term outlook.

The price action on Friday followed a period of mixed signals in the days leading up to the close. On Thursday, September 24, the Malaysia CPO price had edged up to RM4,771 per ton as Dalian oils gained, providing a brief respite from the downward trend. However, this modest gain was insufficient to counteract the broader market forces at play.

Earlier in the week, on Tuesday, September 22, the KPBN Inacom CPO price had fallen to IDR15,621 per kg as Malaysia CPO dropped 0.97%, indicating that the pressure on prices had been building for several days. The consistency of these declines across different days and markets underscores the structural challenges facing the palm oil sector in the current quarter.

Market participants have been closely tracking the interplay between production forecasts and export data. The expectation of higher palm oil production is a recurring theme in recent market commentary, with traders adjusting their positions in anticipation of increased supply. This supply-side pressure is compounded by the relatively weak export figures, which suggest that demand is not growing at the same rate as supply.

The resulting imbalance has led to a buildup of inventories, a factor that historically exerts downward pressure on CPO prices. The recent price drops reflect the market’s reassessment of this supply-demand dynamic, with traders pricing in the risk of continued inventory accumulation.

The Indian government’s decision to cut import duties is a significant policy move that could influence global trade flows. By reducing the cost of importing edible oils, the measure aims to stabilize domestic prices during a period of heightened demand. For global markets, this could mean increased import volumes from India, which would provide a supportive factor for CPO prices.

However, the extent of this support will depend on how quickly Indian buyers respond to the lower duties and how they weigh the cost of palm oil against other vegetable oils such as soybean and sunflower. The competitive landscape for edible oils is dynamic, with price differentials between oils playing a role in determining import preferences.

In Indonesia, the withdrawal of the KPBN tender and the subsequent drop in the top bid to IDR15,000 per kg reflect the domestic market’s sensitivity to global price movements. The 3.32% decline from the previous day’s level indicates a rapid adjustment in local pricing, mirroring the broader trend seen in Malaysia.

This alignment between domestic and international prices highlights the integrated nature of the palm oil market, where local conditions are closely linked to global supply and demand factors. The withdrawal of the tender may also suggest a lack of consensus among buyers and sellers on a fair price, leading to a pause in trading activity as market participants reassess their positions.

The recent price declines have implications for palm oil producers and smallholders in both Malaysia and Indonesia. Lower CPO prices can reduce the income of farmers and millers, potentially affecting their ability to invest in sustainable practices and maintain production levels. The sector’s response to these price pressures will be a key factor in determining future supply trends.

If lower prices lead to reduced planting or maintenance of oil palms, this could eventually tighten supply and support prices in the longer term. However, in the short term, the focus remains on managing the current inventory buildup and navigating the uncertainties in export demand.

Market analysts continue to emphasize the importance of monitoring key indicators such as production data, export volumes, and inventory levels. These factors will provide insights into the underlying health of the palm oil market and help traders make informed decisions. The recent volatility in CPO prices underscores the need for careful risk management, as market conditions can change rapidly in response to new information.

The interplay between supply and demand, along with policy developments in major importing countries, will continue to shape the trajectory of palm oil prices in the coming weeks.

Looking ahead, the market will be watching for signs of stabilization in both production and export figures. Any improvement in export demand could help offset the pressure from higher production and rising inventories. Conversely, further weakness in exports could lead to additional price declines. The Indian government’s import policy will also remain a focal point, with traders assessing the potential impact on global trade flows.

The next few weeks will be critical in determining whether the recent price drops mark a temporary correction or the beginning of a longer-term downtrend in the palm oil market.

The sharp decline in CPO prices on Friday serves as a reminder of the volatility inherent in commodity markets. Traders and investors must remain vigilant and adapt their strategies to changing market conditions. The recent developments in Malaysia and Indonesia highlight the interconnectedness of the global palm oil market and the importance of staying informed about key factors that influence prices.

As the market moves forward, the focus will remain on balancing supply and demand, managing inventory levels, and navigating the complex landscape of global trade and policy. The outcome of these dynamics will have significant implications for producers, consumers, and the broader economy in the palm oil-producing regions.

Related: PT Kharisma Pemasaran Bersama Nusantara (KPBN) · Bursa Malaysia Derivatives