1. Weekly News

India

Indian Refiners Cancel 65,000 MT of Palm Oil Imports Amid Price Surge and Market Volatility

Indian palm oil refiners have canceled 65,000 metric tons (mt) of crude palm oil (CPO) orders for Jul-25 to Sep-25 delivery following a sharp rise in Malaysian palm oil futures, which jumped over 6% week-on-week (WoW). The cancellations agreed upon with sellers came as prices surged above earlier contracted levels of USD 1,050 to 1,065/mt. The volatility follows earlier purchases at lower prices after production recovery had driven rates to an eight-month low.

While this move reflects traders' caution amid price uncertainty, India's palm oil imports are still expected to rise in the coming months due to low domestic stock levels and recent tariff cuts. However, the cancellations have temporarily disrupted the upward momentum in Indian imports.

Malaysia's Sawit Kinabalu Supplies Palm Oil Seeds to India's Patanjali Under Five-Year Agreement

Malaysian state agency Sawit Kinabalu Group has delivered 1.5 million palm oil seeds to India's Patanjali Group under a five-year contract ending in 2027, marking the first deal between a Malaysian state agency and an Indian firm. The contract, totaling 4 million seeds, supports India's efforts to expand domestic palm oil cultivation and reduce import dependency under the National Mission on Edible Oils–Oil Palm (NMEO-OP).

In addition to seed supply, Sawit Kinabalu provides agronomic support and monitoring services. While strong yields have been observed in India's Northeast region, Malaysian domestic demand and replantation subsidies may limit further exports. Patanjali plans to establish a palm oil mill in Northeast India by 2026, aligning with the government's target to expand cultivation to 1 million hectares (ha) by 2025/26 and 6.6 million ha by 2030.

Indonesia

BPDP Launches Second Edition of Palm Oil MSME Catalog to Promote Sustainable Innovation and Economic Inclusion

The Plantation Fund Management Agency (BPDP) has officially launched the second edition of the Catalog of 100 Palm Oil MSME Products in Jakarta. This updated catalog showcases 100 value-added products created by micro, small, and medium enterprises (MSMEs) and cooperatives across Indonesia using palm oil and its derivatives. The products span various sectors including food, textiles, crafts, cosmetics, and organic fertilizers, reflecting palm oil's broad economic and sustainable potential.

The BPDP President Director emphasized the catalog as a key initiative to promote a greener, more inclusive palm oil industry by empowering MSMEs and supporting innovation, job creation, and local entrepreneurship. The program aligns with Presidential Decree No. 132/2024, enhancing the image, market access, and investment in plantation commodities.

The initiative has seen growth in participation, with 798 SMEs involved in 2024, up from 547 in 2023. As of May-25, 532 SME participants have benefited from the 2025 program. BPDP continues to support these enterprises through funding, capacity-building workshops, product promotion, and market linkage, reinforcing palm oil's role in regional development and national economic resilience.

GAPKI and SPKS Forge Strategic Partnership to Strengthen Sustainable Palm Oil Governance

The Indonesian Palm Oil Entrepreneurs Association (GAPKI) and the Palm Oil Farmers Union (SPKS) have signed a memorandum of understanding to enhance farmer empowerment and promote sustainable practices in the palm oil sector. The agreement aims to foster equitable partnerships between independent farmers and GAPKI member companies, strengthen farmer cooperatives, and support Indonesian Sustainable Palm Oil (ISPO) certification and replanting efforts under the People's Palm Oil Rejuvenation (PSR) program.

Representing over 76,000 members across 11 provinces, SPKS will provide training on good agricultural practices, facilitate access to production tools, and promote sustainability-focused certification. GAPKI emphasized the partnership as a concrete step toward more transparent, inclusive, and sustainable palm oil governance, underscoring the vital role of smallholders in achieving national sustainability goals.

Malaysia

Malaysia Urges Industry-MPOB Collaboration to Boost R&D Commercialisation in Palm Oil Sector

Malaysia's government is urging stronger collaboration between industry players and the Malaysian Palm Oil Board (MPOB) to accelerate research and commercialization in the palm oil sector. At the MPOB Palm Oil Technology Transfer Programme (TOT) 2025, the Minister of Plantation Industries and Commodities highlighted that up to 70% of research and development (R&D) outcomes can be commercialized, generating benefits for both entrepreneurs and MPOB through royalties.

Key initiatives include partnerships to commercialize palm-based animal feed technologies and explore eco-friendly palm-based alternatives, such as transformer insulating oil, which could reduce reliance on petroleum products and imports. MPOB's commercialized technologies have already contributed over USD 1.38 billion (MYR 5.9 billion) in market value, enhancing efficiency and product value across the industry. The TOT program is expected to further align research with market needs, supporting the sustainable advancement of Malaysia's palm oil sector.

Malaysia's Palm Oil Stocks Reach Eight-Month High on Strong Production and Imports

Malaysia's palm oil stocks rose to 1.99 million metric tons (mmt) in May-25, marking a 6.65% month-on-month (MoM) increase and the highest level since Sep-24, according to MPOB data. The rise was driven by a 5.05% increase in CPO production and higher imports, which outweighed a sharp 25.6% surge in exports, the strongest in six months.

Despite the stock build-up, the report was seen as slightly bullish, as market expectations had anticipated a rise to 2 mmt. Analysts suggest that unless production accelerates further, demand, particularly from India, which recently halved its CPO import tax, may provide price support. Palm oil's price discount to soybean oil during the peak production season has also increased its attractiveness to buyers.

Malaysia Promotes Sustainable Palm-Based Exports and MSPO 2.0 at Expo 2025 Osaka

Malaysia is advancing efforts to expand exports of value-added, palm-based products to Japan, such as specialty fats, tocotrienols, red palm oil, and palm biomass-based fibreboard while promoting its strengthened sustainability framework, Malaysian Sustainable Palm Oil (MSPO) 2.0. Highlighted during the Ministry of Plantation and Commodities' (KPK) program at Expo 2025 Osaka, MSPO 2.0 reinforces Malaysia's commitment to global sustainability standards and aims to embed traceability and certification across all palm oil value chains.

Strategic agreements, including a partnership between MSPO and AEON Japan, one of Japan's largest retail groups, aim to enhance the visibility of certified products in Japanese retail markets. As of W25, 86% of Malaysia's palm oil is MSPO-certified, with a national target of 95% by end-2025. Under Budget 2025, USD 11.75 million (MYR 50 million) has been allocated to support certification implementation, particularly for independent smallholders. These initiatives support Malaysia's broader push to position itself as a leader in sustainable agri-commodity trade across Asia.

Sri Lanka

Sri Lanka's Palm Oil Import Ban Triggers Economic Strain and Costly Dependence on Refined Oil Imports

Sri Lanka's 2021 ban on CPO imports, implemented for environmental reasons, along with steep taxes on locally refined edible oils, is now significantly impacting the country's economy. Key sectors such as food manufacturing, tourism, and industry face supply and cost pressures, exacerbating the country's post-crisis recovery. With domestic refining halted due to price distortions, Sri Lanka has become reliant on high-cost imports of refined coconut oil, widening the cost gap by up to USD 1,500/mt.

The country now incurs monthly losses of USD 15 to 20 million, totaling up to USD 200 million annually, further straining its balance of payments. Introduced under Gazette No. 2222/31, the ban has proven counterproductive, with only 16.7% of domestic coconut oil demand met. This highlights the economic risks of abrupt policy changes without viable domestic alternatives.

2. Weekly Pricing

Weekly Palm Oil Pricing Important Exporters (USD/kg)

Yearly Change in Palm Oil Pricing Important Exporters (W25 2024 to W25 2025) 

Indonesia

Indonesia's palm oil prices rose by 1.71% WoW to USD 1.19 per kilogram (kg) in W25, marking a strong 21.43% year-on-year (YoY) increase. This price surge reflects broader global dynamics, particularly escalating crude oil prices amid geopolitical tensions in the Middle East and new United States (US) biofuel mandates.

Indonesia's palm oil prices rose amid strong global demand driven by the US Environmental Protection Agency's (EPA) proposal to increase renewable fuel blending, boosting biomass diesel targets and tightening edible oil supply. Rising Brent crude prices support palm oil by increasing biofuel demand and production costs, enhancing its competitiveness. Tax cuts in key markets like India have also stimulated palm oil purchases. Prices are expected to remain firm short term, influenced by energy market volatility and geopolitical factors, with future trends dependent on the US biofuel mandate decision.

Malaysia

In W25, Malaysia's palm oil prices rose by 4.35% WoW to USD 0.96/kg, representing a 14.29% YoY increase from USD 0.84/kg in W25 2024. This upward trend aligns with a sharp rally in soybean oil prices, driven by the EPA's newly proposed Renewable Fuel Obligations (RVOs) for 2026/27. The policy, aimed at expanding US biofuel blending, is expected to increase domestic edible oil consumption, indirectly supporting global palm oil demand.

In addition, rising crude oil prices amid escalating Middle East tensions have further supported palm oil prices. If geopolitical risks persist and US biofuel policies are confirmed, Malaysia's palm oil prices may remain elevated in the short term, with continued volatility driven by energy markets and production dynamics in Southeast Asia.

Thailand

In W25, Thailand’s palm oil prices rose to USD 1/kg, up 4.17% WoW and 13.64% YoY from USD 0.88/kg in W25 2024, reflecting broader global market dynamics. The increase is largely driven by a surge in global energy prices and the US EPA's proposal to raise biofuel blending targets for 2026/27, particularly for biomass-based diesel. Thailand, as a regional producer, may continue to benefit from strong global demand, but price trends will remain sensitive to geopolitical developments and the outcome of US biofuel regulations.

3. Actionable Recommendations

Expand and Deepen Strategic Cultivation and Supply Partnerships with India

Malaysia and Indonesia should strengthen long-term cultivation and processing partnerships with Indian companies, such as the Sawit Kinabalu–Patanjali model. Expanding seed exports, technical assistance, and co-investment in domestic palm oil mills will support India’s self-sufficiency goals while securing future market access. This also mitigates short-term demand volatility caused by price-sensitive cancellations and leverages India's tariff cuts to stabilize regional export flows.

Accelerate Investment in Value-Added Product Development and MSME Integration

Palm oil stakeholders, particularly in Indonesia, should increase support for downstream innovation and MSME participation through programs like BPDP’s product catalog initiative. By promoting diversified, sustainable palm-based products (e.g., cosmetics, biofertilizers, eco-textiles), and aligning with Presidential Decree No. 132/2024, producers can reduce reliance on volatile bulk exports, enhance sector resilience, and stimulate inclusive regional growth. These products also help reposition palm oil positively in premium markets.

Strengthen Market Hedging and Risk Mitigation Mechanisms Across Supply Chains

In light of increased price volatility driven by speculative futures and energy-linked trends, exporters should enhance price risk management through hedging instruments and flexible contract structures. This includes expanding free-on-board (FOB) linked pricing models and developing forward contracts in collaboration with major buyers like India. Enhanced coordination with key buyers can prevent large-scale cancellations and help maintain import momentum despite short-term price spikes.

Sources: Tridge, Republika, Ukr Agroconsult, Financial Times