KUALA LUMPUR, April 2 – Crude palm oil (CPO) prices for 2026 are expected to rise to RM4,350 per tonne, an increase of RM150 per metric tonne, reflecting tighter near-term supply conditions, said Hong Leong Investment Bank Bhd (HLIB).
In a note today, HLIB said CPO prices are expected to remain elevated at RM4,500–RM4,600 per tonne in the second quarter of 2026 (2Q 2026) before moderating from 3Q 2026 onwards.
“Our longer-term CPO price assumption is unchanged at RM4,200 per tonne from 2027, as supply conditions gradually normalise.
“Based on our estimates, every RM100 per metric tonne increase in our average CPO price projection would lift earnings forecast for plantation companies under our coverage by three to eight per cent,” it said.
HLIB said the West Asia conflict is driving a multi-channel shock, lifting CPO via energy-linked demand and near-term supply tightness.
“Fertiliser cost spikes may trigger crop switching to soybeans, capping medium-term upside. Logistics disruptions add temporary premiums.
“CPO is a proxy for crude oil. Elevated crude oil prices will strengthen biodiesel economics, lifting demand for vegetable oils and reinforcing CPO’s role as a proxy for energy markets,” it said.
HLIB maintains an “Overweight” call on the sector, favouring upstream planters with locked-in input costs and stronger margin visibility.
Meanwhile, RHB Investment Bank Bhd said CPO prices have continued to rally (+19 per cent since the start of the West Asia conflict to a year-to-date average of RM4,188 per tonne), driven by the spike in crude oil prices (+46 per cent since the start of the war) and its broader repercussions.
“The most significant repercussion is likely higher biodiesel mandates in Indonesia and globally.
“In Malaysia, there is also talk about implementing a B20 biodiesel mandate again. Some politicians say a B20 mandate would be cheaper by 20 sen per litre compared with current market prices,” it said.
The current B10 mandate in Malaysia uses 1.3–1.4 million tonnes of CPO, while a B20 mandate will double that.
