Crude palm oil (CPO) prices are expected to remain volatile in the near term, as trade tensions and Indonesia’s B50 biodiesel mandate create uncertainty in the market, according to analysts Hoe Lee Leng and Iftaar Hakim Rusli from RHB Investment Bank.

The analysts noted that China’s reluctance to buy U.S. soybeans has led to high global soybean stocks, while the narrowing price gap between CPO and soybean oil could weigh on demand. These two oils often move in tandem due to their use in similar products.

Looking ahead, weather patterns such as a potential La Niña event could tighten supply and support prices. Additionally, Indonesia’s B50 biodiesel mandate is expected to be the largest catalyst for price movements in the sector.

RHB maintains a neutral stance on the CPO sector, highlighting Johor Plantations and IOI Corp as key companies to watch amid ongoing market developments.