Analysts stay cautious on plantation sector as rising palm oil inventory points to softer CPO prices in 2026

to a decade-low in November amid subdued demand from traditional buyers from countries such as India and China, says analysts. As supply is outpacing demand, with higher output and stockpiles in both Malaysia and Indonesia likely to limit upside for prices, analysts expect CPO prices to remain range-bound in the near term and to moderate further in 2026. In a research note on Thursday, MBSB Investment Bank said that the potential implementation of Indonesia’s B50 biodiesel mandate — where 50% of biodiesel in diesel fuel must come from palm oil — in the second half of 2026, could tighten supply locally. “The outlook remains hazy in between supply and demand dynamic, where shortage in PO (palm oil) might be coming by neighbour aggressiveness policy such as [the] impending B50 implementation in 2HCY2026 by the government of Indonesia,” said MBSB. The research house expects CPO prices to remain range-bound in the near term, with average prices projected at RM4,223 per tonne in ...