Image Source: The Star
Malaysian palm oil futures are poised for a strong rally in the coming months, with industry analyst Dorab Mistry predicting prices to breach the 5,000 ringgit-per-tonne mark in November-December 2025 and then climb further to around 5,500 ringgit per tonne in the first quarter of 2026. This outlook signals a bullish trend for one of the world's most important edible oils amid tightening supplies and steady global demand dynamics.
Key Highlights:
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Palm oil futures expected to surpass 5,000 ringgit per tonne by Nov-Dec 2025.
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Further gains possible with prices reaching 5,500 ringgit/t in Jan-Mar 2026.
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Current prices hover near 4,450 ringgit/t with recent volatility due to supply-demand factors.
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Tight global vegetable oil supplies, biodiesel mandates, and festive demand support prices.
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Indian demand remains robust, especially ahead of festive seasons.
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Malaysian production expected to taper after seasonal peak in Q3 2025.
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Competitive pressures from soyoil somewhat cap near-term upside.
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Supply constraints driven by reduced foreign labor, weather impacts, and regulatory measures.
Market Overview and Price Trajectory
Currently, palm oil futures are trading near 4,450 ringgit per metric ton on the Malaysian derivatives exchange, following a period of relative stability through September. The recent dip below this level represented a six-week low but was quickly reversed on expectations of lower production ahead. Dorab Mistry, director at Indian consumer goods firm Godrej International and a respected edible oils market analyst, foresees this price retracement as temporary with an impending bull market starting November.
Mistry points to a confluence of factors expected to tighten palm oil supply into the last quarter of 2025 and early 2026. Malaysian crude palm oil output is projected to decline from November as the peak harvesting season ends and foreign worker recruitment freezes persist, reducing labor availability critical for plantation operations. Simultaneously, India’s palm oil imports have surged, reflecting a strong seasonal demand boost from the approaching major festivals—traditionally a period of heightened edible oil consumption in the subcontinent.
Strategic Demand and Supply Drivers
Several global dynamics underpin this anticipated upward rally:
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Biodiesel Mandates: Increasing biodiesel blending mandates in countries like Indonesia and the US are tightening supply availability for edible and feedstock oils globally, including palm oil.
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Vegetable Oil Supply Deficit: Analysts expect global consumption of major vegetable oils—palm, soybean, sunflower, and rapeseed—to outpace production growth in 2026, contributing to a supply deficit that supports higher prices.
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Competitive Pricing: While soyoil remains a competitor, its production challenges and tightening supplies also elevate prices, indirectly supporting palm oil values ().
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Exchange Rate Factors: The relatively weaker Malaysian ringgit against the US dollar encourages export demand from buyers relying on dollar-based pricing, adding further support.
Projected Price Milestones
According to Mistry’s forecast:
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By November-December 2025, palm oil futures are expected to break past the 5,000 ringgit/t barrier.
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By January-March 2026, coinciding with both the Chinese Lunar New Year and the Ramadan period—two critical demand windows—the price could further ascend to around 5,500 ringgit/t.
Such price levels are poised to mark a significant rally from current trading ranges circa 4,400-4,500 ringgit/t. Mistry highlights that the merging of heightened festival consumptions combined with constrained supply will drive this bull run.
Interplay of Risks and Market Sentiment
Though bullish, the market is not without potential downside pressures. Weak demand from certain key markets has recently capped prices within a mid-4,000 ringgit range (). Additionally, any easing of export restrictions or unexpected weather improvements could ease tightness. Nevertheless, the solid fundamentals presented by Mistry’s analysis suggest these are likely short-term mitigants.
Closing Thoughts
The upcoming months represent a critical window for Malaysian palm oil futures, with a robust price rally predicted through to early 2026. Traders, producers, and investors should closely monitor evolving consumption patterns, supply chain developments, and regulatory shifts impacting labor and production outputs. Dorab Mistry’s detailed forecasts provide a valuable lens into the factors shaping the palm oil market’s bullish trajectory and offer a clear price roadmap for the near future.
Source: Malaysian Palm Oil Council data, Bursa Malaysia derivatives, and industry analyst Dorab Mistry’s latest insights
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