Malaysia CPO Prices Fall for Fourth Session as Stocks Rise, Demand Weakens

KUALA LUMPUR, 25 SEPTEMBER 2026 —

Kuala Lumpur, Sept. 24, 2026 — Malaysian crude palm oil (CPO) futures extended their slide for a fourth consecutive session on Wednesday, September 23, as the market grappled with mounting inventory pressures and a sharp contraction in export volumes.

This sustained decline marks a significant shift in market sentiment, driven by a confluence of bearish factors that have weighed heavily on the sector’s pricing power.

The primary driver of the price erosion is the growing consensus among market participants that Malaysia’s palm oil inventories are poised to reach critical levels. Industry estimates suggest that domestic stocks could approach or even exceed the 3 million ton mark by the end of September. This accumulation is largely attributed to a surge in production, particularly from the state of Sabah, which has contributed to the overall supply increase.

As production outpaces consumption, the market is increasingly focused on whether demand can absorb this additional output, with the current trajectory suggesting a persistent oversupply that continues to suppress prices.

Compounding the inventory concerns is a notable weakness in export performance, which has further dampened bullish expectations. Cargo surveyors reported that Malaysian palm oil product exports for the period of September 1 to 20 fell between 12.8% and 24.7% compared with the same period in August. While the specific figures varied among different cargo survey companies, the data consistently pointed to a significant slowdown in shipments during the first three weeks of the month.

This decline in export activity has reinforced the narrative that rising supply is not being matched by sufficient international demand, thereby intensifying bearish sentiment within the Malaysian futures market.

The pressure on CPO prices was not isolated to the Malaysian market but was mirrored by weakness across competing vegetable oil sectors globally. On Wednesday, the most-active soybean oil contract in Dalian fell 0.61%, while Dalian palm oil declined by 1.79%. Similarly, on the Chicago Board of Trade, soybean oil prices dropped 0.97%.

Traders closely monitor these movements because soybean oil and other vegetable oils compete directly with CPO for market share in both the global edible oils and biofuel markets. The synchronized decline across these commodities indicates a broader softening in the vegetable oil complex, reducing the relative price advantage of palm oil.

Additional headwinds emerged from the energy sector, where lower crude oil prices further weighed on market sentiment. Cheaper fossil fuels reduce the economic attractiveness of vegetable oils as feedstocks for biodiesel production, thereby limiting a key demand driver for CPO. This dynamic is particularly relevant in the current market environment, where biofuel demand is a critical component of the overall consumption equation.

The interplay between crude oil prices and vegetable oil values continues to be a significant factor in determining the floor for CPO prices.

Global demand indicators have also raised serious concerns among market participants, with data from the European Commission highlighting a stark decline in imports. EU palm oil imports for the 2026/2027 marketing season reached approximately 560,000 tons through September 20, representing a 26% drop from the corresponding period of the previous season.

This substantial decrease shows the challenges facing the palm oil market as producers contend with increasing supplies while demand growth remains insufficient to absorb the additional volume. The European market, a major destination for Malaysian palm oil, is thus contributing to the broader global demand weakness.

In Indonesia, the domestic CPO market reflected similar downward pressure. The CPO price through PT Kharisma Pemasaran Bersama Nusantara (KPBN) was set at IDR 15,515 per kilogram on Wednesday, September 23. This represented a decline of IDR 106 per kilogram, or 0.68%, from the highest CPO bid of IDR 15,621 per kilogram recorded on Tuesday, September 22.

The parallel decline in both Malaysian futures and Indonesia’s domestic CPO market underscores the broader regional pressure currently facing palm oil prices, indicating that the bearish trend is not confined to a single exchange but is a regional phenomenon.

The recent price action follows a series of consecutive declines that have characterized the market in recent weeks. On Friday, September 18, Malaysian CPO had fallen 0.77% to RM4,898 per ton amid global vegetable oil weakness. Prior to that, on September 21, prices had dropped 0.84% as the ringgit and export data weighed on sentiment. The consistent downward trajectory over these sessions highlights the persistent lack of bullish catalysts in the market.

Traders have been cautious, with the market struggling to find a bottom as supply concerns dominate the narrative.

The current market environment is further contextualized by earlier data points that showed a gradual erosion of prices. On September 17, the KPBN Inacom CPO price had held steady at IDR 15,758 per kilogram, while Rotterdam CPO was at US$1,580 per ton. However, the subsequent days saw a clear deterioration in price levels.

The decline in exports and the rise in inventories have created a perfect storm for bearish sentiment, with market participants adjusting their positions accordingly. The focus has shifted from potential supply disruptions to the immediate challenge of managing excess stocks.

Looking ahead, market attention will now turn to Malaysia’s latest production and export data for signs of whether the expected increase in inventories will continue through the end of September or begin to be offset by a recovery in demand. The upcoming data releases are critical for determining the next direction of CPO prices. If exports remain weak and production continues to rise, the pressure on prices is likely to persist.

The situation also highlights the broader structural challenges facing the palm oil industry. With global demand growth lagging behind supply increases, producers are under pressure to manage their inventories effectively. The decline in EU imports and the weakness in competing vegetable oils suggest that the market is facing a period of adjustment.

For Malaysian and regional stakeholders, the coming weeks will be in determining whether the current bearish trend can be reversed or if prices will continue to face downward pressure. The interplay between domestic production, export performance, and global demand will remain the key factors to watch.

In summary, the fourth consecutive session of declines for Malaysian CPO futures reflects a market under significant stress from multiple fronts. Rising inventories, weaker exports, and subdued global demand have created a bearish environment that is difficult to counter. The data from the European Commission and cargo surveyors provide concrete evidence of the challenges facing the sector.

As the market awaits further data, the focus remains on whether demand can recover sufficiently to absorb the additional supply. The current price levels and the trajectory of key indicators will be closely monitored by traders and industry participants in the days ahead.