Rise in stockpiles likely to cap CPO prices

The sharp rise in palm oil stocks to 1.87 million tonnes in April, the highest in six months, may put a cap on crude palm oil (CPO) prices moving forward, say analysts. According to Hong Leong Investment Bank (HLIB) Research, the uptrend in palm oil stock level would likely persist in the near term, driven by seasonally higher cropping pattern, subdued festive-driven demand, and weak CPO prices – which imply lower discretionary biodiesel blending activities. Furthermore, the conflict between India and Pakistan, two of the major importers of palm oil, could dampen demand from these markets if the tension re-escalates, it said in a report yesterday. On CPO prices, the research house said “we maintain our 2025 to 2026 CPO price assumptions of RM4,000 per tonne and RM3,800 per tonne, with the view that continued output recovery (particularly from Indonesia) will cap palm oil prices over the near to medium term.” Year-to-date, CPO price has eased by over 20% to RM3,780 per tone due ...