Jakarta. Crude palm oil (CPO) prices climbed to 4,520 ringgit (US$974) per ton on Monday, up 0.53 percent from the previous day, as tighter supply expectations and Indonesia’s expanding biodiesel mandate continued to support the market. The benchmark price has gained 1.69 percent over the past month and is 5.9 percent higher than a year ago, according to data from Trading Economics.

Hong Leong Investment Bank (HLIB) said in a research note that it is maintaining its 2025–2026 CPO price assumptions at 4,300 ringgit and 4,200 ringgit per ton, respectively. “If the latest production figures are any indication, palm oil stock levels may have reached their peak in September and are expected to begin trending lower from October, supporting our view of firm CPO prices in the near to medium term,” HLIB said.

Industry data showed Malaysia’s end-September inventories rose 7.2 percent month-on-month to 2.36 million tonnes, the highest in nearly two years, while output slipped 0.73 percent to 1.84 million tonnes, marking the first decline in three months. Despite the inventory build, analysts said strong export demand is helping offset bearish pressure. Malaysian shipments rose 9.9–19.4 percent in the first 10 days of October, according to cargo surveyors.

In Indonesia, policy interventions and biodiesel expansion continue to influence market prices. The Attorney General’s Office recently handed over 1.8 million hectares of seized palm oil plantations to state-owned Agrinas Palma Nusantara, part of efforts to reclaim illegally operated lands and increase state revenue.

At the same time, Indonesia’s B40 biodiesel mandate, implemented in January, has increased domestic palm oil consumption. HLIB estimated biodiesel usage reached 7.42 billion liters by mid-July, equivalent to an additional 2 million tonnes of domestic demand. The government is now running road tests on B50, a 50 percent palm oil blend, with plans to roll out the policy in 2026. Energy Minister Bahlil Lahadalia said the new blend could help Indonesia end diesel imports next year.

However, a stronger ringgit and weaker Dalian vegetable oils have capped further gains, while Malaysia’s plantation ministry projects average CPO prices in 2026 between 3,900 and 4,100 ringgit, citing stronger global supply and higher output from competing oils.