Palm Oil Picks Up to 20-Month High

2026-08-20 09:44 By Agna Gabriel 1 min. read

Palm oil extended a rally to around 4,965 ringgit per tonne, reaching the highest level since December 2024, boosted by stronger biofuel demand and growing concerns over production.

Indonesia started its ambitious B50 biodiesel programme, which is expected to divert more palm oil toward domestic fuel production and reduce export availability.

Buyers are moving to secure supplies ahead of the programme’s full implementation in October.

At the same time, dry conditions have affected plantations in Indonesia and Malaysia, raising concerns about yields.

The developing El Niño weather pattern could further worsen dryness across Southeast Asia, potentially limiting production in the world’s two largest palm oil-producing countries.

The USDA expects global palm oil inventories to fall to a nine-year low in the 2026/27 season.

Meanwhile, disruptions to sunflower oil exports from Russia and Ukraine are encouraging buyers to turn to alternative vegetable oils, adding further support to palm oil.



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