Biofuel demand drives vegetable oil prices to multi-year highs

Global demand for vegetable oils from the biofuel sector is surging, pushing international prices to their highest levels since mid-2022, according to the latest FAO Food Outlook report released Nov 13. The FAO Vegetable Oil Price Index reached 169.4 points in October 2025, up 11.3% from May and marking the sharpest increase among major food commodity indices over the period. Global biofuel demand is set to remain robust in 2026 as major producer countries pursue supportive policies and higher blending mandates, despite diverging feedstock trends and volatile markets. The latest FAO Food Outlook identifies oilseed-based biofuels and sugarcane ethanol as areas of growth, driven by government initiatives in Indonesia, Brazil and the US, while high input costs and trade disruptions challenge supply chains. The FAO forecasts a 2.1% expansion in global utilization of oils and fats for the season. This growth is “largely driven by expectations of higher demand from the biofuel sector,” ...