Palm Oil Supply Shortage to Last at Least Until 2026

The global palm oil market will remain in a state of shortage at least until 2026, according to a forecast by analysts at the Malaysian company Kenanga Research. Experts expect that the market situation will be stable in the near term without significant factors for a sharp price increase. The plantation sector in Malaysia, according to their estimates, maintains a neutral outlook, and the supply shortage that emerged in 2025 will continue into the following year.

This is reported by AgroReview

Stable Prices Amid Limited Supply

According to analysts’ estimates, palm oil prices will remain stable despite some anticipated decline. The forecast price for crude palm oil (CPO) is 4,300 ringgit per ton in 2025 and 4,000 ringgit per ton in 2026. The expected increase in supply in 2026 will only balance the usual growth rate of demand (3-4%), so it will not lead to a significant increase in inventory levels.

Company Performance and Environmental Challenges

Kenanga Research reports that in the third quarter of this year, only 67% of plantation producers met or exceeded expectations, compared to 89% in the second quarter. Meanwhile, in the third quarter, 89% of planters achieved or exceeded the consensus forecast compared to the previous period.

“Previously, OleoScope analysts noted that the mass production of oil from palm fruits in the tropics raises serious concerns primarily among environmental organizations and human rights groups, as production significantly contributes to the deforestation of tropical forests in countries where the culture of human rights producers is emerging.”

Additionally, it should be noted that the area under palm plantations has increased by 11% over the past 20 years and is expected to reach 27.9 million hectares by the end of this year.