KUALA LUMPUR, May 12 (Xinhua) -- Analysts on Tuesday turned more constructive on palm oil prices, citing rising biodiesel demand, mounting cost pressures and structural shifts in crude oil markets, even as near-term inventory builds and export uncertainty persist in Malaysia, the world's second-largest palm oil producer.
Maybank Investment Bank said in a note that crude oil prices are unlikely to revert to pre-Middle East conflict levels, a view that has supported policy moves in Indonesia and Malaysia to raise biodiesel blending mandates.
For May, MBSB Research expects crude palm oil (CPO) prices to remain broadly stable.
Prices are expected to be supported by seasonally softer output during the pollination phase and expectations surrounding Malaysia's B15 and Indonesia's B50 biodiesel rollout targeted for June-July 2026.
Malaysia's palm oil stockpile rose 23.8 percent year on year in April to about 2.31 million tonnes, driven by softer post-festive exports, official data showed on Monday.
Its output fell 3.4 percent year on year to 1.63 million tonnes, while exports rose 18 percent to 1.3 million tonnes on restocking ahead of higher export duties.
UOB Kay Hian said production is expected to strengthen into the peak season, but exports may stay muted as high prices curb demand and palm oil remains less competitive against South American soybean oil. ■
