MUMBAI: Malaysian palm oil futures are likely to jump 27% to a more than three-year high of 5,500 ringgit per ton in January–March 2026, as rising biodiesel consumption in top producer Indonesia tightens supplies, industry analyst Dorab Mistry said on Tuesday.

The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange slid 102 ringgit, or 2.3%, to 4,341 ringgit ($1,034.56) a metric ton at the close.

"January to March 2026 will be very bullish for Palm futures with 5500 ringgits possible if Indonesia continues to seize plantations and talks about implementing B50 biodiesel programme," Mistry told delegates at an industry conference in Cartagena, Colombia.

Palm oil plantations that have been seized or are slated for seizure are expected to show a decline in productivity, he said.

Indonesia handed over 674,178 hectares(1.7 million acres) of palm oil plantations to state firm Agrinas Palma Nusantara earlier this month, taking to 1.5 million hectares (3.7 million acres) the total area of land given to the company. Indonesia currently mandates a 40% palm oil content in biodiesel and plans to raise it to 50% starting next year.

Palm oil prices are expected to rise after the peak production period ends in October and could surpass 5,000 ringgit in November–December, he said.

Palm oil production growth is nearly flat as aging palm trees, minimal expansion of acreage, and limited replanting of the oldest trees weigh on output in top producers Indonesia and Malaysia, he said. (Reporting by Rajendra Jadhav; Editing by Anil D'Silva)