The geopolitical situation is causing significant uncertainty in the markets. Energy prices are highly volatile and are likely to remain at high levels for weeks.

This has led to an improvement in the competitiveness of biodiesel, putting further pressure on vegetable oil prices. News in the coming weeks regarding biofuel policies in Indonesia, the US, Brazil and the European Union could have a significant impact on vegetable oil prices. Indonesia has just announced that it will implement the B50 mandate in 2026, although the exact date has not yet been specified.

Oil World estimates that global consumption of oils and fats will increase by 7.7 million this season, driven mainly by increased use in the energy sector (primarily palm, soybean and rapeseed).

The stock-to-use ratio is expected to fall to 12.8%, reaching its lowest level in several years. Relatively low opening stocks increase market risks in the event of potential crop losses.

· Palm: Current stocks are high in Malaysia, but global production is expected to decline by 2026, driven mainly by Indonesia.

· Sunflower: The drop in production during the current season is keeping prices high, but the new harvest is expected to be good and price pressure is set to emerge from October onwards (new season).

· Soybean: Global soybean stocks remain high and supply should not be an issue if the weather is favourable in the US this summer. Attention will focus on actual domestic soybean consumption in the US.

· Rapeseed: Demand is rising, but availability is good.

Below is the price trend over recent months for the four main oils:

As far as lauric oils are concerned, the conflict in the Middle East is also having a significant impact on their prices. Rising oil prices have improved the competitiveness of palm kernel oil in the oleochemical industry. As a result, PKO reached a four-year high in Rotterdam last week. Despite comfortable stock levels in Malaysia, PKO production is expected to decline between April and September, which could further support prices against a backdrop of rising demand.

Coconut oil prices have followed the upward trend in vegetable oils to a lesser extent, reducing their premium over PKO to just 80 USD/tonne, down from 300 USD/tonne in January. Although CCNO production appears to be recovering, Philippine CCNO exports have remained relatively low so far this season.

For first-hand information on these and other aspects of the vegetable oil market, we invite you to download and read the LIPSA Market Report by clicking on the button above, where we cover the following points: