Analysts Neutral On Palm Oil Sector, Expects CPO Price To Average RM4,100-RM4,200 A Tonne In 2025

KUALA LUMPUR, July 11 (Bernama) -- MIDF Amanah Investment Bank Bhd has maintained its “Neutral” call for the palm oil sector with an average crude palm oil (CPO) target price of RM4,100 per tonne for 2025. 

“Prices were firmer at the beginning of the month, reaching a high of RM3,953 a tonne, before easing to RM3,912 towards the end of June with the market fully pricing in the prospect of extensive supply,” it said in a research note.

The investment bank anticipates the average CPO price to remain flat at RM3,990 a tonne in July.

“Bearing the expected rise in production leading to higher closing stock levels, this could reduce price competitiveness,” it said.

RHB Investment Bank Bhd also maintains its “Neutral” call as it expects edible oil supply to recover with supportive demand.

“We believe CPO prices will taper off in the third quarter of 2025 (3Q 2025) before picking up in 4Q 2025. Our new CPO price assumption is RM4,100 a tonne for 2025. Year to date-2025 prices are now at RM4,373 a tonne,” it added. 

RHB Investment Bank expects the situation to turn around as Malaysia has lowered its July CPO reference price to RM3,730 a tonne, leading to a lower 8.5 per cent export duty for July against 9.5 per cent in June.

“This may encourage exporters to expedite shipments to July to enjoy the lower cost,” it said.

It added that CPO is trading at a wider discount to soybean oil, at US$214 a tonne, comfortably above the historical discount of US$100-US$150 a tonne,” it said. 

Meanwhile, following palm oil stock level rising for the fourth consecutive month to 2.03 million tonnes in June 2025, Hong Leong Investment Bank Bhd expects stock level will likely remain at above two million tonnes in July 2025. It said potentially stronger demand from India may be offset by an anticipated seasonal increase in crop yield and the absence of festive-driven demand.

“We maintain our 2025-2026 CPO price assumptions of RM4,200 a tonne and RM4,000 a tonne, respectively.

“We believe CPO prices will remain subdued in 3Q 2025, before turning more upbeat in 4Q 2025,” it said, adding that it is “Neutral” on the sector.

Public Investment Bank Bhd expects a strong recovery in exports given the current steep CPO price discount to soybean oil, which should help to attract interest from price-sensitive markets such as India, Pakistan, and Bangladesh.

“The inventory level is likely to remain at current levels in the near term amid a rebound in production. At the time of writing, CPO futures traded higher at RM4,184 a tonne. Year to date, CPO price averaged at RM4,362 a tonne.

“We maintain a “Neutral” rating on the sector, with a full-year CPO price forecast of RM4,200 a tonne,” it said. 

-- BERNAMA