To Indonesia's Palm Oil Entrepreneurs: Celebrate!
Jakarta, CNBC Indonesia - The price of crude palm oil (CPO) surged this week. The rise is welcome news for Indonesia and its domestic palm oil entrepreneurs, given that Indonesia is the world’s largest producer of palm oil.
The price increase occurred amid rising global energy prices and a weaker Malaysian ringgit, which makes CPO cheaper for international buyers.
Refinitiv notes that the benchmark CPO contract for May delivery on the Bursa Malaysia Derivatives Exchange closed at MYR 4,367 per tonne in the last trading session of the week, Friday 6 March 2026, up 3.8%. This price is the highest since 24 October 2025, more than four months ago.
Over the week, CPO prices jumped 8.04%. This weekly rise is the highest since November 2024, more than a year ago.
CPO Becomes the Cheapest Vegetable Oil
In addition to external factors, CPO price is supported by rising competitiveness versus other vegetable oils. Currently palm oil trades at prices relatively cheaper than soybean oil, rapeseed oil, or sunflower oil.
Palm oil prices are even moving almost on a par with gas oil, potentially boosting new demand, particularly for the energy and biofuel sectors.
However, the market is also watching for potential disruptions to the global distribution of vegetable oils due to the conflict in the Middle East, which could affect the flow of commodities.
Strengthening Chinese Market and Ringgit Weakening
Positive sentiment also comes from movements in the vegetable oil markets in China. The most active soybean contracts on the Dalian Exchange rose about 1.13%, while palm oil contracts on the same exchange jumped 2.33%.
By contrast, soybean oil prices on the Chicago Board of Trade fell about 0.65%. Nevertheless, overall movements in vegetable oil prices continue to support CPO as these commodities compete in the global vegetable oil market.
Separately, the Malaysian ringgit weakened by around 1.37% against the US dollar this week. This condition also helps support demand. A weaker ringgit makes CPO cheaper for buyers using foreign currencies.
The rise in CPO prices is also underpinned by the surge in world oil prices. Brent crude rose 28% over the week while WTI surged 35% over the week. This increase is the largest since 1983. These energy commodities substitute for one another, so their prices influence each other.
Technically, Reuters analyst Wang Tao estimated that CPO prices could test a resistance level at MYR 4,260 per tonne. If that level is breached, prices could extend gains toward the region of MYR 4,337 per tonne.