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Volatile CPO Price Expected Amid Geopolitical Tensions

Strategic Insights

— 1 min read

RHB Research expects the crude palm oil (CPO) price to remain volatile in the near term due to ongoing geopolitical tensions between the United States and China. The situation has been exacerbated by Argentina's removal of export taxes on soyabean, corn, wheat, and biodiesel until the end of October. This development, combined with China's reluctance to purchase US soyabeans and its stockpiling of South American supplies, is likely to worsen the situation, according to RHB Research. The potential impact on the CPO price is significant, with the US expected to be left with high stockpiles if China refrains from purchasing US soyabeans this season.

Key Takeaways:

  • The CPO price is expected to remain volatile in the near term due to geopolitical tensions between the US and China.
  • China's reluctance to purchase US soyabeans and its stockpiling of South American supplies will worsen the situation, with the US expected to retaliate.
  • Argentina's temporary removal of export taxes on soyabean, corn, wheat, and biodiesel until the end of October has further complicated the situation.
  • RHB Research expects the global soyabean stock-to-usage ratio to reach 29.5 per cent in 2026, putting pressure on soyabean and soyabean oil prices.
  • The Indonesian B50 mandate, a blend of 50 per cent CPO-based biofuel and 50 per cent conventional diesel, remains the biggest catalyst for CPO price.
  • RHB Research raised its 2025-2026 CPO price forecasts to RM4,350 per tonne for 2025 and RM4,250 per tonne for 2026.
  • The research firm maintains its "neutral" call on the plantation sector, citing that share prices have largely priced in the improved price direction.
  • RHB Research increased its CPO price assumptions from RM4,100 per tonne for 2025 to RM4,350 per tonne and from RM4,000 per tonne for 2026 to RM4,250 per tonne.

Statistics:

  • 100 per cent tariff imposed by the US on Chinese exports (Source: RHB Research)
  • 29.5 per cent: estimated global soyabean stock-to-usage ratio in 2026 (Source: RHB Research)
  • RM4,350 per tonne: RHB Research's revised 2025 CPO price forecast (Source: RHB Research)
  • RM4,250 per tonne: RHB Research's revised 2026 CPO price forecast (Source: RHB Research)
  • RM4,100 per tonne: original 2025 CPO price forecast (Source: RHB Research)
  • RM4,000 per tonne: original 2026 CPO price forecast (Source: RHB Research)

Sources:

  • RHB Research (Note: Date not specified)
  • RHB Investment Bank Bhd (RHB Research)

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