1. Weekly News

Global

Global Demand and Indian Policy Shift Sustain Palm Oil Price Strength as Exports Rise

Global palm oil demand continues to strengthen due to its favorable price advantage over competing oils like soybean and sunflower. Despite anticipated production and stock recovery in Southeast Asia, palm oil prices remain resilient, supported by rising export interest. Malaysia's exports increased by 25.6% month-on-month (MoM) in May-25, reflecting increased global demand. India's recent reduction of import duties on crude palm, soybean, and sunflower oils, from 27.5% to 16.5%, is expected to boost palm oil imports to 750,000 to 850,000 metric tons (mt) by Jul-25. This surge may influence production recovery in Malaysia and Indonesia and support pricing for other vegetable oils. According to the Dalian Commodity Exchange (DCE), as of June 9, refined, bleached, and deodorized (RBD) palm oil stood at USD 1,197.74/mt, up USD 1.40 from June 6.

CPOPC Welcomes New Leadership to Strengthen Global Unity and Sustainability in Palm Oil Sector

Representing 89% of global palm oil output, the Council of Palm Oil Producing Countries (CPOPC) enters a new chapter with new leadership taking effect in Jun-25. Founded by Indonesia and Malaysia, and joined by Honduras and Papua New Guinea, the Council continues to expand with observer countries like Nigeria and the Congo.

As the world’s most efficient edible oil crop, oil palm occupies less than 0.5% of global agricultural land yet produces over 36% of global edible oils. Palm oil faces disproportionate criticism, despite its high efficiency and low land use. The CPOPC emphasizes that responsible production and solidarity among producers are key to securing fair recognition and advancing sustainability. The sector must prioritize knowledge-sharing, innovation, and smallholder inclusion amid growing global demand. Drawing from successful collaboration during the COVID-19 crisis, the industry is urged to unite in promoting credible, sustainable practices and meeting shared challenges.

India and China Drive Renewed Palm Oil Demand as Prices Regain Competitiveness

Global demand for palm oil is expected to rise in the coming months, driven by renewed buying interest from India and China amid favorable price conditions. Despite a 12% decline in Malaysian palm oil prices this year following a 20% rise in 2024, palm olein has regained its competitiveness against rival oils. Indian and Chinese importers are actively purchasing for Jun-25 to Aug-25 delivery, which is expected to support prices between USD 918.70 to 989.42/mt (MYR 3,900 to 4,200/mt). As of June 9, 2025, RBD palm oil was priced at USD 1,197.74/mt. Strong demand is likely to sustain export volumes, particularly in Aug-25, and may accelerate production recovery in Malaysia and Indonesia, indirectly supporting prices for other vegetable oils like soybean and sunflower.

Indonesia

Indonesia Targets Nigeria for Offshore Palm Oil Expansion Amid Growing Bilateral Trade

Indonesia has reaffirmed its interest in offshore palm oil production, with Nigeria emerging as a primary target due to its historical and strategic relevance in the sector. Bilateral trade between the two countries surged from USD 2.61 billion in 2021 to USD 4.78 billion in 2022, with a surplus in Nigeria's favor. In response, stakeholders in Nigeria's Port Harcourt economic belt, led by the Port Harcourt Chamber of Commerce, Industry, Mines, and Agriculture (PHCCIMA), are engaging with the Nigeria Indonesia Chamber of Commerce and Industry (NICCI) to explore investment and export opportunities.

Indonesia Plans 25 MMT Palm Oil Exports in 2025 Following Production Recovery and Stable Global Demand

Indonesia is projected to increase palm oil exports to 25 million metric tons (mmt) in 2025, up by 1 mmt from the previous year, supported by a recovery in production following early-year disruptions. Despite a 5% drop in exports in the initial months, highlighted by a sharp Apr-25 decline, production rebounded to 47.8 mmt by May-25, enabling export recovery. From Jan-25 to Apr-25, 7.4 mmt were exported, nearly matching 2024 levels. Key markets include the European Union (EU), China, India, and Pakistan, with rising demand from China helping offset lower shipments to India. Stable global demand and improved processing technologies continue to support Indonesia’s export performance, alongside efforts to diversify markets through trade deals in Asia and Africa.

Indonesia-EU Free Trade Agreement Nears Completion, Expected to Boost Palm Oil Exports and Investment by 2026

Indonesia aims to finalize a free trade agreement with the EU by 2026, following nearly nine years of negotiations. The deal is expected to enhance market access for key Indonesian exports, including palm oil, textiles, footwear, and seafood, while Indonesia will also increase access to EU agricultural and manufactured goods. Despite past disagreements over EU trade rules linked to deforestation concerns affecting palm oil shipments, both sides remain engaged, with the agreement potentially coming into effect by late 2026 or early 2027. The deal is projected to boost Indonesian exports by at least 5.4%, with government targets reaching a 50% increase within three years, alongside increased EU foreign direct investment in sectors such as renewables and semiconductors.

Malaysia

Malaysia’s Palm Oil Exports Surge in May-25 Following Broad-Based Recovery

Malaysia's palm oil exports rose by 25.6% MoM in May-25 to 1.39 mmt, supported by a 5.1% increase in crude palm oil (CPO) production to 1.77 mmt, according to the Malaysian Palm Oil Board (MPOB). Palm kernel oil and cake production grew by 19.2% and 20.1%, respectively, while total palm oil inventories expanded by 6.4% to 1.99 mmt.

Exports of palm kernel oil and palm kernel cake rose sharply by 20.7% and 37.3%, respectively, with biodiesel exports surging 39.3% to 32,848 mt. Oleochemical shipments also grew by 6.0% MoM. No CPO imports were recorded in May-25, while palm kernel oil imports fell 43.5%. The data reflects strong recovery and sustained global demand across multiple palm oil derivatives.

2. Weekly Pricing

Weekly Palm Oil Pricing Important Exporters (USD/kg)

Yearly Change in Palm Oil Pricing Important Exporters (W24 2024 to W24 2025)

Indonesia

Indonesia's palm oil prices declined 4.10% week-on-week (WoW) to USD 1.17 per kilogram (kg) in W24, yet remain 21.88% higher year-on-year (YoY) from USD 0.96/kg. This price movement reflects growing domestic demand amid stagnant production. Indonesia faces production challenges with limited growth averaging 0.42% annually from 2020 to 2024, due to aging oil palm trees and land constraints, while domestic consumption surges at an average of 7.4% annually, driven by increased food use, oleochemicals, and especially biodiesel. Government mandates have raised biodiesel blends progressively from B30 in 2020 to B40 in 2025, with B50 targeted for 2026, boosting internal palm oil demand to a projected 26.1 mmt for 2025. Consequently, export volumes are expected to decline to 27.5 mmt in 2025 from 29.5 mmt in 2024, limiting supply for international markets.

Malaysia

In W24, Malaysia’s palm oil prices held steady at USD 0.92/kg, showing no weekly changes but reflecting a 9.52% YoY increase from USD 0.84/kg. Despite a 25.6% MoM rise in exports to a six-month high of 1.39 mmt, palm oil stocks climbed for the third consecutive month, reaching 1.99 mmt, the highest since Sep-24. This increase was driven by a 5.05% rise in production and higher imports. Although inventories surpassed market expectations, analysts view the data as moderately bullish, as strong Indian demand, supported by a recent import tax cut and palm oil's price advantage over soybean oil, could tighten supply going forward. A weaker ringgit (MYR) and firm crude oil prices further enhance palm oil's competitiveness for biodiesel. If production does not accelerate sharply in the coming months, prices may remain supported by robust export demand during the peak production season.

Thailand

In W24, Thailand's palm oil prices declined by 1.03% WoW and MoM to USD 0.96/kg and remained 9.09% higher YoY from USD 0.88/kg. This annual increase reflects regional trends shaped by limited supply and resilient export demand. Thailand's recent designation as a “Low Risk” country under the European Union Deforestation Regulation (EUDR) is expected to improve access to European markets by easing compliance requirements. This regulatory advantage could enhance Thailand's export competitiveness and support increased shipment volumes in the latter half of 2025. Despite current stability, if global vegetable oil supplies remain tight, these developments may place modest upward pressure on Thai palm oil prices.

3. Actionable Recommendations

Expand Strategic Market Diversification and Strengthen Emerging Market Engagement

Palm oil producers, particularly from Indonesia and Malaysia, should intensify efforts to diversify export markets beyond traditional buyers such as India and China. Leveraging growing demand in regions like Africa, the Middle East, and the Association of Southeast Asian Nations (ASEAN), alongside the expanding influence of the CPOPC, can reduce dependency risks. Coordinated trade missions, bilateral partnerships (e.g., Indonesia and Nigeria), and targeted promotional campaigns will help secure long-term contracts and stabilize export volumes amid global price and policy fluctuations.

Accelerate Investment in Downstream Processing and Sustainable Product Innovation

To capture the rising global demand for refined palm oil derivatives and biodiesel, Malaysian and Indonesian producers should prioritize investments in downstream refining, oleochemical production, and biofuel technology. This will enhance product value, improve export competitiveness, and align with government mandates such as Indonesia’s progressive biodiesel blending targets (B40 and B50). Additionally, adopting and promoting credible sustainability practices through CPOPC collaboration can counteract negative perceptions and unlock access to premium markets like the EU, especially as trade agreements advance.

Strengthen Offshore Production Partnerships and Supply Chain Resilience

Given land constraints and rising domestic consumption limiting production growth in Indonesia and Malaysia, stakeholders should deepen offshore cultivation partnerships, with a focus on Nigeria and other emerging producers. Facilitating technology transfer, capacity building, and export standardization in these regions will diversify supply sources, mitigate production risks, and reinforce global palm oil supply chain stability. These efforts should be integrated with upcoming trade and investment events, leveraging CPOPC solidarity to support sustainable expansion.

Sources: Tridge, Ukr AgroConsult, Reuters, GAPKI, The Star