Analysis and Outlook for April 2026: CPO Prices to Hold Firm Above RM4,450 Supported by Energy Markets and Geopolitical Risks
Crude palm oil (CPO) prices surged to a 15-month high of RM4,800 (USD1,221) in March, driven largely by disruptions in global energy markets following escalating tensions between the United States and Iran. Brent crude oil prices climbed by 63% to USD119 per barrel, while gasoil prices on the ICE exchange rose sharply by 84% to USD1,381 per tonne. As a result, the palm oil-gasoil (POGO) spread narrowed significantly from USD310 to below USD100 per tonne—its lowest level in 2 years.
Heading into April, palm oil prices are expected to be shaped by several
key factors:
Stronger Biodiesel Demand and Tighter POGO Spread to Support Prices
Biodiesel has become increasingly attractive amid rising energy prices, which are likely to accelerate biofuel blending policies in major producing countries such as Brazil and Indonesia in the coming months. This could reduce the availability of both palm oil and soybean oil for export, lending further support to prices.India to Continue Favouring Palm Oil Despite Price Parity
India is expected to maintain its preference for palm oil imports over South American soybean oil, even at price parity, primarily due to a sharp increase in freight costs. Palm oil imports rebounded strongly in February and March and are anticipated to remain robust into April.Higher Sunflower Seed and Rapeseed Output to Weigh on Prices
A notable increase in sunflower seed production is projected for the 2026/27 marketing year, particularly in the Black Sea region and the EU, following elevated prices in the previous season. In addition, persistently high fertiliser costs may encourage farmers to shift towards crops requiring lower input, such as soybean and sunflower seed, potentially increasing overall supply.
A Brief Market Recap
Escalating conflicts in the Middle East have significantly disrupted energy flows through the Strait of Hormuz, pushing crude oil and gasoil prices to their highest levels since June 2022. Approximately 20% to 30% of global crude oil and liquefied petroleum gas (LPG) trade passes through this critical chokepoint, underscoring its importance to global energy supply.
China suspended exports of gasoline, diesel and aviation fuel from 11 March 2026 as a precautionary measure to safeguard domestic supply amid potential shortages. As the world’s largest crude oil importer and a major exporter of refined fuels, reduced exports from China are likely to further tighten fuel availability across Asia.
India, which imports around 54% of its LPG requirements from the Middle East—largely via the Strait of Hormuz—has introduced measures to diversify supply sources while implementing anti-hoarding controls to stabilise domestic markets. Any prolonged gas supply disruption could affect multiple sectors, including HORECA, potentially weakening vegetable oil consumption.
Meanwhile, Thailand raised its biodiesel blending mandate from B5 to B7, effective 14 March 2026, as a temporary measure to reduce reliance on imported crude oil amid tightening energy markets.
Malaysia's Palm Oil Supply and Demand for February 2026
Table 1: Monthly statistics of Malaysian palm oil for February 2026 (MPOB, 2026).
Palm Oil Supply and Demand Dynamics in April : Key Changes and Trends
Malaysia’s palm oil production declined seasonally to 1.28 million tonnes in February, representing an 18.5% drop (-293,000 tonnes) from January. This decline was primarily due to fewer harvesting days in the shorter month, compounded by the Lunar New Year public holiday.
Despite this, cumulative production for January to February rose by 17.9% (+434,000 tonnes), supported by stronger output in January. However, production growth began to moderate in February due to heavy rainfall
across Johor, Sabah and Sarawak.
Exports remained firm, accounting for 88% of production and contributing to lower stock levels. This was despite a 22.5% month-on-month decline (-327,000 tonnes) to 1.12 million tonnes. Cumulative exports in the first two months of the year increased by 18.7% (+406,000 tonnes) to 2.58 million tonnes, with India contributing the largest share of the growth.
Shipping disruptions at the Strait of Hormuz are expected to weigh on market demand from the Middle East. In 2025, Malaysia exported 1.82 million tonnes of palm oil to the region, of which 851,000 tonnes were transported via the
Strait of Hormuz to key markets including Iran, United Arab Emirates, Saudi Arabia, Iraq, Kuwait, Qatar and Bahrain—equivalent to approximately 71,000 tonnes per month.
Nevertheless, stronger domestic consumption in Indonesia and Thailand, driven by higher biodiesel blending, is expected to help cushion the impact on overall demand.
Price Trends of Gasoil, Palm Oil, and Soybean Oil
Figure 2: Price trends of gasoil, palm oil and soybean oil (Oil World, 2026).
Palm Oil Price Outlook: Supported by Energy Markets, Capped by Uncertainty
Vegetable oil prices moved into an upward trend in March following a prolonged period of consolidation since mid-2025. This shift was supported by rising crude oil prices amid logistical disruptions in the Strait of Hormuz, as well as force majeure declarations by several major oil refineries in the Middle East.
Among the major vegetable oils, palm oil has emerged as the price leader, rising by 10% since the onset of the conflict on 27 February. In comparison, rapeseed oil increased by 4%, sunflower oil by 3%, and soybean oil by just 1% in the global market.
The sharp increase in gasoil prices has enhanced the competitiveness of biodiesel blending. Brazil’s biodiesel industry has called for an increase in the blending mandate from B15 to B16, while Indonesia is accelerating road tests for B50 blending to reduce import dependence, although the timeline for implementation remains uncertain.
In contrast, the US soybean oil market has diverged from the global trends in anticipation of stronger domestic biodiesel demand. Soybean oil at the US Gulf traded at a premium of USD380 per tonne over Argentine soybean oil and USD320 per tonne above crude palm oil (See Figure 2). Elevated gasoil and US soybean oil prices are expected to continue supporting
palm oil prices.
India’s palm oil imports surged in the first two months of 2026, rising by 965,000 tonnes or 149% year-on-year to 1.6 million tonnes. Although South American soybean oil traded at price parity with palm oil in March, India is expected to continue favouring palm oil due to significantly higher freight costs. Shipping from South America typically takes six to seven weeks, compared with just seven to ten days from Malaysia.
Global Sunflower Seed and Rapeseed Production
Figure 3: Global sunflower seed and rapeseed production (Oil World, 2026).
At the same time, high vegetable oil prices, coupled with an oversupply of oil meals and feed grains, have encouraged farmers to prioritise crops such as sunflower seed and rapeseed, which offer oil content of around 41% to 43%. As a result, global production of these oilseeds is projected to increase sharply, with combined output expected to rise by 6.8 million tonnes to149 million tonnes in the 2026/27 marketing year. Compared with 2019/20 levels, production is projected to increase substantially by 30.4 million tonnes (see Figure 3).
This anticipated increase in supply may place downward pressure on sunflower oil prices in the coming months, suggesting that the current price premium may not be sustainable if projections materialise.
Looking ahead, palm oil prices are expected to remain above RM4,450 (USD1,132) in the near term, supported by elevated energy prices and a favourable POGO spread. However, weaker global economic growth and heightened price volatility stemming from ongoing uncertainties in the Middle East may temporarily delay imports from major markets, potentially capping further price gains.
Exchange Rate: USD1 = RM3.93