What’s Ahead for Palm Oil: Helios AI Forecasts Price Firmness Into Early 2026

The global palm oil market is closing 2025 with a familiar story and a new twist. Prices are climbing again, but this time, the driver isn’t just global demand. It’s climate asymmetry: while Indonesia’s plantations are drying out, Malaysia’s are soaking up too much rain.

Helios Horizon’s latest forecast, covering October 2025 through March 2026, projects an average price increase of 4.41% above historical norms, with average oil palm fruit prices reaching $0.87 per kilogram. But beneath this modest global average lies a sharp regional divide: Indonesia’s prices are set to surge 15.86% above trend, while Malaysia’s prices remain almost flat at +0.16%.

This divergence in weather and yield risk is already shaping the next quarter’s price trajectory — and Helios AI’ models suggest it could sustain upward pressure through Q1 2026.

Climate divergence reshaping price trajectories

In Malaysia, Helios AI’s seasonality graph shows more short-term variability, not stability. The November price sits at $1.09/kg, which is above last year and the seasonal average, but it also shows a −4.41% month-over-month dip. That pattern reflects monsoon-driven harvesting and export timing noise: fundamentals remain intact, yet intermittent rains are creating visible price swings from week to week.

Figure 1. Oil palm fruit price forecast — Malaysia (All Varieties).

Indonesia displays a steadier upward trajectory. Prices (e.g., Palmkernel Expeller 22% Protein) average $0.21/kg in November 2025, up ~10.5% year over year, with our forecasts pointing to a gradual rise into early 2026. The slope is consistent rather than choppy, aligning with drought-related tightening that accumulates over weeks instead of producing abrupt spikes.

Figure 2. Oil palm fruit price forecast — Indonesia (Palmkernel Expeller 22% Protein).

These two trajectories capture a broader truth: global palm oil prices are entering a climate-defined phase, where local weather patterns will outweigh macroeconomic factors in shaping price behavior.

Indonesia’s drought signals tightening fundamentals

The climate dashboards show concerning dryness across Indonesia’s two largest producing regions: Riau and North Sumatra. Both areas are experiencing high climate risk scores, indicating extended periods of low rainfall and heat stress — two factors known to suppress fresh fruit bunch (FFB) formation and oil content.

In Riau, the current climate risk score stands at 82% (Very High), with a projected peak of 88.3% on November 6. The system flags these conditions as “Too Dry,” aligning with patterns last observed during the 2015 El Niño event. If dryness persists through January, Helios projects a 4–6% drop in FFB yield quarter-over-quarter — enough to tighten Indonesia’s exportable supply even amid stable demand.

Figure 3. Helios AI Climate Dashboard — Riau, Indonesia.

Very high drought risk (88.3%) through November threatens near-term yields.

Similarly, North Sumatra shows a 59.4% risk score today, with risk rising to 76.7% by December 12. While rated “Fair” overall, the forecast shows multiple peaks of dryness through January, suggesting consistent moisture stress during fruit development.

Figure 4. Helios AI Climate Dashboard — North Sumatra, Indonesia.

Risk of dryness peaks in mid-December, aligning with a 10-year high in heat stress anomalies. This climatic stress is already being priced in. Helios AI’ models show Indonesian palm fruit prices averaging 15.86% higher than normal, pushing total market averages up even as Malaysia’s conditions remain steady.

Malaysia’s wet monsoon: stability with disruption

While Indonesia endures prolonged dryness, Malaysia’s weather pattern tells a more complex story — especially in Sabah, one of its top palm oil producing states. According to our climate dashboard, Sabah begins the season with a short-lived drought phase in early December, before rapidly transitioning into “Too Wet” conditions later in the month and into January.

Figure 5. Helios AI Climate Dashboard — Sabah, Malaysia.

This mixed climate sequence is challenging for producers. The early dryness can stress palms during fruit development, slightly reducing bunch weight. Then, as heavy rain arrives, harvesting becomes difficult, trucks struggle on plantation roads, and mills face irregular fruit deliveries.
Even though total annual output remains steady, these operational interruptions can create short-term supply tightness, the kind of micro-disruption that drives local price volatility in the physical market.

Price Outlook and Procurement Implications

Helios Horizon projects global oil palm fruit prices to average ~$0.87/kg from October 2025 to March 2026 (about +4.4% vs. historical), with Indonesia on a steadier, gradually rising path (≈+15.9% vs. average) and Malaysia near flat on average but noticeably more volatile month to month due to monsoon-related harvest and shipment timing. Refined products like Palm Olein and Palm Stearin are expected to stay slightly below average amid steady downstream supply.

For procurement teams, the market’s stability is deceptive. Indonesia’s dryness and Malaysia’s rain both constrain near-term availability, tightening supply even as fundamentals appear balanced. Those waiting for monthly data risk reacting after the fact. The prudent move is to lock in partial Q1 cover and monitor everything closely to anticipate shifts early. In a market this sensitive to weather, foresight is the advantage, and Helios AI’ predictive models make it measurable.