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Palm oil outlook · data to 2 Nov 2026

Palm Oil Fundamentals

Malaysia just produced its biggest month ever and stocks are at a record 3.51 Mt. October output held near that level, so stocks probably rose again, to about 3.6 Mt. That caps prices into year-end. But exports are surging in October, India has cut duties, and a strong El Niño is forming, which usually cuts output 6–12 months later. Near term looks heavy; 2027 looks tighter.

Now to December 2026

Neutral to bearish▼ Lean lower

Record stocks keep rallies short. The October export surge and India's duty cut stop a deep fall.

January to June 2027

Bullish▲ Lean higher

Stocks draw down in the low-output months, and El Niño could take a further 9–12% off spring output.

FCPO price path, RM per tonne

Monthly average to October 2026, then three paths: central, bear (the market's premium fades) and El Niño (output cut like 2016, at half strength).

What changed since the 23 October report

October output stayed high. An industry survey puts the full month at −0.8% on September, with individual planters ranging from −5% to +10%. That means about 2.10 Mt, not the 2.00 Mt I had.
The export surge slowed in the last days of the month. For 1–25 October, two cargo surveyors show +47% and +68% on September, down from +59% and +78% at day 20. October exports now look like about 1.69 Mt, down from 1.77 Mt.
October stocks are now likely a new record of about 3.61 Mt, against 3.43 Mt in the last report. This lowers the price paths by about 5%.
FCPO peaked at RM4,595 on 20 October and eased to RM4,433 by 2 November. The October average was RM4,439.
Indonesia's November export tax drops. The estimated reference price is $979 (bracket 7), down from $1,042. Levy plus duty on CPO falls from about $308/t to $246/t, which makes Indonesian oil cheaper against Malaysia's.
Still in place: El Niño at 1.4 with a 62% chance of a strong event by October–December. India's 11% CPO duty since 24 September.

Malaysia: record supply

MPOB balance to September 2026. The forecast scales the last two seasons' monthly pattern by 2026's growth (production +4%, exports +4%). October uses the production survey and cargo surveyor data.

End-stocks, million tonnes

Actual to September 2026. Base forecast with its likely range and the El Niño case.

Production by month, million tonnes

2026 actual to September, then forecast (dashed).

Exports, first 20 days of each month, thousand tonnes

Cargo surveyor estimates for 2026. October is the jump at the end.

Weather and supply capacity

El Niño brings drier weather to Malaysia and Indonesia. Palm trees respond with fewer fruit bunches 6–12 months later.

El Niño index (ONI), °C

Three-month seasons. Above 0.5 is El Niño; above 1.5 is strong. The forecast gives 89% odds of at least 1.5 by October–December.

The last strong El Niño, Malaysia production, Mt

After the 2015 event, 2016 output fell 13%, and 18–25% in March–May.

Malaysia replanting, thousand hectares a year

Replanted trees take about 3 years to bear fruit. 2025's jump to 191k ha trims supply in 2026–28.

Supply drivers at a glance

Mature area is shrinking: 5.04 M ha in 2025, down from 5.14 M ha in 2021. Immature area rose to 657k ha.
Yields peaked in September: fresh fruit yield 1.88 t/ha and CPO yield 0.38 t/ha, the highest in the file.
Costs are rising: 2026 estates cost about RM8,144/ha in Malaysia (+14%) and $1,085/ha in Indonesia (+17%), mainly fertiliser.
Indonesia's B50 mandate needs 16.75 M kL of biodiesel in 2026 (B40 used 15.62 M kL in 2025), and 20.1 M kL at full B50.

Buyers: India and China

India is the swing buyer and has just been helped by a duty cut ahead of Diwali (8 November). China is still sitting on heavy stocks.

Import margin, US$ per tonne

Below zero, importing costs more than the local price pays. India uses the 11% duty from 24 September.

Palm oil port stocks, thousand tonnes

MPOC monthly stock comparison.

India palm oil imports, thousand tonnes

Three strong months running into the festive season.

Palm oil premium over soybean oil, US$ per tonne

Palm is normally the cheaper oil. A premium like August's ($211) pushes buyers to soy.

Indonesia: biodiesel keeps a lid on stocks

GAPKI balance to July 2026, in thousand tonnes.

Production, exports and stocks

Stocks have eased from 3.04 Mt in May as exports recovered.

Palm oil used for biodiesel

1.29 Mt in July as the B50 roll-out lifts domestic use.

Price: the market is looking past the stock pile

On stocks alone, futures would be about . They trade about a third higher because the market is pricing El Niño, B50 and the export rebound.

FCPO daily settle, RM/t

Since January 2024, with this year's high and low.

Price against the stock-based level, RM/t

The gap opened in September when stocks jumped but prices held.

Forecast, October 2026 to June 2027

Ranges are one standard deviation. Quarter-end months are shaded.

	Production			End-stocks		FCPO, RM/t
Month	Base	El Niño	Exports	Base	El Niño	Central	El Niño

Stocks build to about 3.6–3.8 Mt by December, then fall to about 3.25 Mt in March. In the El Niño case they fall to about 2.9 Mt by June instead of rebuilding.
Watch next: the October MPOB report (around 10 November), full-month surveyor exports, India's buying after Diwali (8 November), Indonesia's official November reference price, and the El Niño update.