1. Weekly News

Global

Global Palm Oil Production Expected to Reach Record 80.4 MMT in 2025/26

Global vegetable oil production is projected to reach 234.5 million metric tons (mmt) in 2025/26, exceeding the anticipated demand of 228.9 mmt. Palm oil remains the leading vegetable oil, with output expected to hit a record 80.4 mmt, a 2.2 mmt increase from 2024/25. Indonesia is the largest producer with 47.5 mmt, followed by Malaysia at 19.2 mmt.

Tight Palm Oil Supply Drives Global Shift to Soybean Oil, Reshaping Trade and Boosting Demand

Global reliance on palm oil has declined amid tightening supply, primarily due to Indonesia's rising domestic biodiesel demand and stagnant production growth. In 2025/26, constrained palm oil availability is expected to support continued substitution with soybean oil, particularly as production rebounds in Argentina and Brazil. Consequently, India has increased its intake of soybean oil, which remains more competitively priced.

This shift is altering trade patterns, with reduced short-haul palm oil shipments from Southeast Asia offset by increased long-haul soybean oil imports from South America. The resulting change in trade dynamics is supporting demand for chemical tankers, especially International Maritime Organization (IMO)-certified Medium Range (MR) vessels. Meanwhile, ongoing weather-related disruptions in Malaysia and South America could add further volatility to vegetable oil markets, keeping palm oil prices elevated.

India

India's Palm Oil Imports Surge 87% MoM in May-25 as Prices Fall, Offering Limited Relief to Exporters

India's vegetable oil stocks fell to 1.35 mmt as of May 1, the lowest since Jul-20, due to reduced imports amid a sharp rise in palm oil prices earlier in the year. However, May saw a 37% month-on-month (MoM) import surge to 1.18 mmt, with palm oil imports rising 87% to 600,000 metric tons (mt) as its price fell below that of soybean and sunflower oils. This increase supported palm oil prices in Malaysia, despite heightened competition from Indonesia. Nonetheless, palm oil futures rose only 2% in May-25, constrained by higher production and falling global oil prices. India's recent import duty cut on crude edible oils is expected to spur demand but offer limited price support to exporters.

Indonesia

Indonesia Targets Nigeria for Offshore Palm Oil Production Following Growing Bilateral Trade and Collaboration

Indonesia is pursuing offshore palm oil production in Africa, with Nigeria identified as a key focus due to its historical connection to oil palm cultivation. Trade between Nigeria and Indonesia grew significantly from USD 2.61 billion in 2021 to USD 4.78 billion in 2022, with the trade balance shifting in Nigeria's favor. In Port Harcourt, local business groups are actively seeking collaboration opportunities, particularly through the Port Harcourt Chamber of Commerce (PHCCIMA) and the Nigeria Indonesia Chamber of Commerce and Industry (NICCI). Discussions highlight Indonesia's interest in partnerships involving technology transfer, training, and export quality improvements, with major players expressing interest. This collaboration aims to enhance Nigeria's palm oil value chain, address quality standardization challenges, and boost non-oil exports between the two countries.

Indonesia's Palm Oil Export Value Rises 20% Despite Lower Volume on Higher Prices

Indonesian palm oil exports increased by 20% in value from Jan-25 to Apr-25, reaching USD 7.05 billion despite a 5.37% decline in export volume to 6.41 mmt. The rise in export earnings was driven by a 26.54% increase in average palm oil prices, from USD 869.16/mt in early 2024 to USD 1,099.82/mt. Crude palm oil (CPO) and its derivatives accounted for 8.54% of Indonesia's non-oil and gas exports in this period, with India ranking as the third-largest export destination at USD 5.59 billion.

Malaysia

MPOC Secures USD 28.83 Million in Potential Trade at MPOF Philippines 2025

The Malaysian Palm Oil Council (MPOC) generated an estimated USD 28.83 million (MYR 122 million) in potential trade during the Malaysian Palm Oil Forum (MPOF) Philippines 2025, held in Manila from June 3 to 4. Featuring 121 targeted meetings between Malaysian suppliers and Filipino buyers, the forum aimed to strengthen Malaysia's palm oil presence in the Association of Southeast Asian Nations (ASEAN). Co-hosted with the Malaysian Oleochemicals Manufacturers Group (MOMG) and the United Coconut Association of the Philippines (UCAP), the event drew over 400 participants. The forum underscored bilateral trade significance, with Malaysia supplying 61% of the Philippines' 2024 palm oil imports. It also emphasized lauric oil cooperation and highlighted Malaysia's 24% export growth to ASEAN, Africa, and the Middle East under its five-year regional strategy.

Malaysia Seeks Stronger Palm Oil Ties with China’s Anhui Under RCEP Framework

Malaysia is seeking to strengthen palm oil cooperation with China's Anhui Province under the Regional Comprehensive Economic Partnership (RCEP) framework, aiming to attract investment in downstream processing and high-end oil product innovation. In 2024, Malaysia exported USD 2.49 billion (MYR 10.57 billion) worth of palm oil and related products to China, comprising over half its bulk commodity exports. Opportunities for collaboration include refining capacity upgrades and entry into high-value market segments. Malaysia also seeks to leverage Anhui's agricultural technology to enhance tropical fruit processing and diversify agri-export offerings, reinforcing its role as a key palm oil supplier in the region.

2. Weekly Pricing

Weekly Palm Oil Pricing Important Exporters (USD/kg)

Yearly Change in Palm Oil Pricing Important Exporters (W23 2024 to W23 2025) 

Indonesia

Indonesia's palm oil prices rose by 2.52% week-on-week (WoW) to USD 1.22 per kilogram (kg) in W23, marking a substantial 24.49% year-on-year (YoY) increase from USD 0.98/kg. This price escalation aligns with official trade data showing that despite a 5.37% drop in export volume to 6.41 mmt from Jan-25 to Apr-25, export earnings surged 20% YoY to USD 7.05 billion. The key driver was a sharp 26.54% rise in average unit values, from USD 869.16/mt to USD 1,099.82/mt.

This upward pressure on prices stems from tight domestic supply, influenced by rising biodiesel demand and weak production growth, structural factors that continue to constrain Indonesia’s exportable surplus. As palm oil remains a major contributor of Indonesia’s non-oil and gas exports (8.54% share in early 2025), the current price trajectory may persist if supply limitations endure and global demand, particularly from major importers like India, remains resilient.

Malaysia

In W23, Malaysia's palm oil prices held steady at USD 0.92/kg with no weekly changes, reflecting a 9.52% YoY increase from USD 0.84/kg. However, underlying market sentiment remained cautious as CPO futures traded lower, pressured by anticipated stock build-ups, profit-taking activity, and weaker trends in global vegetable oil markets, particularly in China and the United States (US).

Despite strong export demand, Malaysia's palm oil inventories are projected to rise due to a gradual recovery in production. This expected stock accumulation could exert downward pressure on prices soon, especially if global vegetable oil benchmarks remain subdued. Further price stabilization or softness may persist unless export growth outpaces production gains or adverse weather disrupts yields.

Thailand

In W23, Thailand's palm oil prices remained unchanged at USD 0.97/kg for the fourth consecutive week, reflecting stable domestic supply-demand dynamics. However, on a YoY basis, prices rose 10.23% from USD 0.88/kg, in line with broader regional trends driven by tighter supply and strong export demand.

The recent classification of Thailand as a “Low Risk” country under the European Union Deforestation Regulation (EUDR) is expected to bolster its palm oil export prospects. The designation simplifies compliance procedures for Thai exporters, enhancing market access to the European Union (EU) and improving Thailand's global competitiveness. As traceability and sustainability gain prominence in buyer markets, this regulatory advantage may support higher export volumes in the second half of 2025. Stable domestic pricing combined with expanding export opportunities, especially to Europe, could provide modest upward pressure on Thai palm oil prices, particularly if regional supply constraints persist or if global vegetable oil markets tighten.

3. Actionable Recommendations

Strengthen Market Diversification and Long-Term Partnerships

Indonesian and Malaysian palm oil producers should expand outreach to emerging markets in Africa, the Middle East, and ASEAN, leveraging existing trade growth and forums like the MPOF. This will reduce dependency on fluctuating markets such as India and mitigate risks from shifting trade flows and price competition.

Enhance Downstream Processing and Innovation under RCEP

Malaysia should prioritize attracting investment in downstream refining and high-value product innovation through RCEP frameworks, especially in collaboration with regions like China's Anhui Province. Upgrading processing capacity will improve product competitiveness and open access to premium markets.

Invest in Supply Chain Resilience and Offshore Production Partnerships

Indonesia should advance offshore palm oil cultivation partnerships, exemplified by cooperation with Nigeria, focusing on technology transfer, quality standardization, and capacity building. This will diversify supply sources, reduce export constraints from domestic biodiesel demand, and strengthen global supply chain stability.

Sources: Tridge, Hellenic Shipping News, Ukr AgroConsult, Grain Trade, Biofuels International, Jakarta Globe, Mundo Marítimo