Malaysia’s crude palm oil (CPO) futures closed lower on Friday, Oct. 9, after Budget 2027 omitted an expected export-duty waiver. The decision reversed some of the optimism that had lifted futures a day earlier.
On Bursa Malaysia Derivatives, the October 2026 contract fell RM86 to RM4,362 per tonne, while November also lost RM86 to RM4,465. December declined RM69 to RM4,592, according to Bernama’s contract-by-contract report.
Budget Decision Ends Waiver Bet
Traders had anticipated a temporary duty exemption that could improve Malaysia’s export competitiveness against Indonesian supply. CPO futures rose on Thursday, Oct. 8, as the waiver possibility circulated. January 2027 gained RM131 to RM4,767, February added RM115 to RM4,854 and March rose RM91 to RM4,925, Bernama reported.
The Budget 2027 announcement on Friday did not include the waiver. It instead set out support focused on replanting assistance for smallholders, according to Bernama. The government’s wider plan totals RM459.8 billion and targets a 3.3% fiscal deficit for 2027, according to the official budget speech. BullBuzz has published a separate breakdown of the budget.
The expected tax relief mattered to exporters competing with Indonesian supply. Sunvin Group research head Anilkumar Bagani told Bernama on Thursday that Malaysia’s CPO export duty was about US$109 per tonne and said waiving it would make Malaysian product more competitive. Replanting support and an export-duty waiver work on different timelines: one targets future farm output, while the other would immediately affect the cost of shipping CPO abroad.
Iceberg X proprietary trader David Ng told Bernama that sentiment weakened after the expected waiver failed to materialise. He identified support at RM4,500 and resistance at RM4,680 per tonne. Those are one trader’s market levels, not guaranteed floors or ceilings.
Near-Month Contracts Fell More
All listed contracts ended lower, with the largest losses in the two nearest delivery months:
- October 2026: down RM86 to RM4,362 per tonne.
- November 2026: down RM86 to RM4,465 per tonne.
- December 2026: down RM69 to RM4,592 per tonne.
- January 2027: down RM58 to RM4,709 per tonne.
- February 2027: down RM44 to RM4,810 per tonne.
- March 2027: down RM23 to RM4,902 per tonne.
Trading volume eased to 145,207 lots from 160,977 on Thursday, while open interest rose to 337,867 contracts from 333,864. The physical October South CPO price declined RM10 to RM4,450 per tonne, Bernama reported.
Inventory Data Is Next Catalyst
Market attention now turns to the Malaysian Palm Oil Board’s September supply-and-demand report, expected on Monday, Oct. 12. Business Recorder, citing a Reuters survey, said Malaysian palm oil inventories were expected to reach a record high for September, topping the previous peak from December 2018 as production outpaced weak export demand. That remains a survey estimate until MPOB publishes its figures.
Other market signals were mixed. Dalian soyoil rose 0.91%, Dalian palm oil gained 0.83%, and Chicago soyoil added 0.49%, according to the same report. Lower crude prices reduce palm oil’s relative appeal as a biodiesel feedstock, while a 0.12% gain in the ringgit against the US dollar makes Malaysian exports slightly more expensive for foreign buyers. BullBuzz has also tracked the recent shift in crude prices, another input for palm-oil traders.
What CPO Traders Should Watch
The Monday MPOB release will show whether September stocks and exports match the market’s expectations. Traders will also monitor the ringgit, crude oil and competing vegetable-oil futures as Bursa trading resumes. The RM4,500 support and RM4,680 resistance cited by Ng offer reference points, but the next official stock data and any new government clarification on export duties could change sentiment.