1. Weekly News

India

India Drives Malaysian Palm Oil Demand as Global Biofuel Pressure Supports Prices

In Jul-25, India's palm oil imports from Malaysia rose 16% month-on-month (MoM) to 301,000 metric tons (mt), marking the highest monthly volume in nine months, even as Malaysian stocks reached a 19-month high of 2.11 million metric tons (mmt). Strong demand from India ahead of Diwali and steady imports from Sub-Saharan Africa are expected to support exports. Global vegetable oil markets are influenced by rising biodiesel demand, as soybean oil use for biofuels in the United States and Brazil tightens export availability and lifts overall prices.

Indonesia's potential B50 mandate in 2026 and limited global palm oil output growth are likely to sustain firm prices, while Malaysia's production may peak early and decline from Sep-25, keeping stockpiles manageable. CPO prices recently surpassed USD 1067.49/mt (MYR 4,500/mt) and are expected to remain above USD 1020.05/mt (MYR 4,300/mt) in the near term, supported by strong biofuel demand and tight soybean oil exports. However, competitiveness against soybean oil will be key for sustained price strength.

India Turns to Colombia and Guatemala for Discounted Palm Oil

Indian importers purchased palm oil from Colombia and Guatemala for the first time, attracted by steep discounts as the two Latin American producers sought to offload surplus stocks. Although Indonesia and Malaysia remain India’s main suppliers, South American cargoes secured Oct-25 deliveries. These shipments were over USD 10/mt cheaper even after higher freight. Industry officials warn that rising Colombian and Guatemalan output and their ability to divert supplies could pressure Malaysian benchmark futures. India's festive season, beginning in Sep-25, is expected to keep palm oil demand firm, supporting sustained import flows.

Indonesia

Indonesia Targets 60 MMT CPO Output by 2030

Indonesia aims to boost crude palm oil (CPO) production to 60 mmt annually by 2030, up from 48.2 mmt in 2024, to meet rising demand across food, biofuel, oleochemical, and export markets. The Plantation Fund Management Agency (BPDP) plans to reach this target through workforce training, scholarships, and a plantation rejuvenation program to boost productivity.

Indonesia Seeks Zero Tariffs on Palm Oil and Key Exports With Ongoing Trade Talks with US

Indonesia is negotiating with the US to secure zero import tariffs on key exports, including palm oil, cocoa, and coffee, according to the Coordinating Ministry for Economic Affairs of Indonesia. Officials emphasized that these products, which are not produced in the US, carry high export value, and further talks with the Office of the United States Trade Representative (USTR) are underway. While Indonesia's export tariff to the US was reduced from 32% to 19% under a bilateral agreement, authorities aim for deeper cuts to strengthen competitiveness. Indonesia remains the dominant supplier of palm oil to the US, holding an 85% market share.

Malaysia

Malaysia Limits US Risk Through Sustainability and Market Diversification in Palm Oil Exports

Malaysia's palm oil exports to the US remain marginal. The Plantation and Commodities Ministry (KPK) reported that Malaysia shipped 191,231 mt of palm oil to the US in 2024, representing only 1.1% of its total exports, limiting the impact of potential US restrictions. The KPK emphasized that American buyers rely heavily on Malaysian Sustainable Palm Oil (MSPO)–certified supplies, making substitution difficult. To safeguard smallholders from external risks, the government is providing replanting incentives and disease-control grants. Analysts highlight that Malaysia is leveraging sustainability standards as a competitive advantage while diversifying markets to reduce exposure to policy-driven disruptions.

Peru

Ucayali Internship Showcases Sustainable Palm Oil Practices and Economic Impact

In Ucayali, Peru, the Regional Technical Board of the Palm Oil Production Chain (COCEPU) and the Regional Directorate of Agriculture (DRA) organized an internship at Ocho Sur’s facilities, a Peruvian agribusiness group dedicated to large-scale oil palm cultivation and processing, bringing together producers, academics, and private sector representatives. The program showcased Ocho Sur’s palm oil practices, emphasizing sustainability, regenerative agriculture, and circular economy models. Officials noted the visit strengthened producers’ capacity to adopt improved techniques, positioning palm oil as a key driver of jobs, income, and regional economic development.

2. Weekly Pricing

Weekly Palm Oil Pricing Important Exporters (USD/kg)

Yearly Change in Palm Oil Pricing Important Exporters (W34 2024 to W34 2025)

Indonesia

Indonesia's palm oil prices rose 4.88% week-on-week (WoW) to USD 1.29 per kilogram (kg) in W34, up 30.30% year-on-year (YoY), supported by strong export momentum and tightening stocks. Jun-25 exports surged 35.37% MoM to 3.61 mmt, led by processed palm oil and CPO shipments, with notable gains to China and India. Despite rising production (+6.51% YoY in H1-2025), robust demand from biodiesel (+3.95% MoM) and key buyers lifted export value 28.84% MoM to USD 3.64 billion, while stocks fell to 2.53 mmt. The combination of firm global demand, declining inventories, and higher average export prices suggests continued upward support for Indonesia's palm oil prices. However, competitiveness against rival vegetable oils will remain decisive for sustaining gains.

Malaysia

Malaysia's palm oil prices rose 1.94% WoW to USD 1.05/kg in W34, up 17.98% YoY from USD 0.89/kg in W34 2024, supported by firm biodiesel-driven demand and tightening soybean oil availability. With CPO at USD 1092.87/mt (MYR 4,607/mt), the Malaysian Palm Oil Council (MPOC) expects prices to remain above USD 1020.05/mt (MYR 4,300/mt) in the near term, though future stability hinges on competitiveness against soybean oil in the export market. Declining US and Brazilian soybean oil exports, and Indonesia’s potential B50 mandate in 2026, are set to tighten global vegetable oil supply further, lending continued support to palm oil. In the months ahead, limited stock build-up in Malaysia alongside steady demand from India and Africa is likely to sustain firm price momentum.

Thailand

Thailand’s palm oil prices rose by 0.92% WoW to USD 1.10/kg in W34, rising 17.02% YoY, driven by tightening supply amid declining production. Annual output has decreased 3–4% since 2025 due to climate shocks, labor shortages, and competition from alternative oils, creating market deficits. These supply constraints are expected to sustain near-term price support, while improvements in labor availability or favorable weather conditions could ease pressures and moderate future price growth.

3. Actionable Recommendations

Strengthen Market Diversification and Strategic Sourcing

Palm oil exporters should increase market presence in emerging regions such as Sub-Saharan Africa and Latin America to offset potential price pressure from Colombian and Guatemalan discounted cargoes. Importers should develop flexible sourcing strategies to balance purchases from Indonesia, Malaysia, and alternative suppliers, ensuring supply stability during seasonal demand peaks such as India’s festive season.

Capitalize on Biofuel-Driven Demand and Policy Incentives

Producers and exporters should align production and export strategies with rising biodiesel mandates, including Indonesia’s potential B50 program in 2026, to capture higher-margin sales. Investments in downstream processing and value-added products can further strengthen competitiveness against rival oils and maximize revenue from tight global vegetable oil supplies.

Enhance Sustainability Credentials and Capacity Building

Indonesia and Malaysia should continue promoting sustainable palm oil practices, including MSPO certification and smallholder support programs, to secure long-term market access in regulated markets. Workforce training, plantation rejuvenation, and knowledge-sharing initiatives, such as Peru’s Ocho Sur program, can improve productivity and reinforce palm oil’s role as a driver of economic growth.