Malaysia’s palm oil stocks remain at historically high levels, but have begun to decline as production enters the seasonal low cycle and demand improves, especially from India and China. Medium-term uncertainty over supply, related to Indonesian policies (biodiesel mandates, export levies, land confiscation), continues to support prices.

As we enter the seasonally weaker production period (first half of the year), the magnitude of the decline in production and the pace of exports will be key factors in determining the speed of stock reduction. Malaysia’s production in 2026 is expected to decline by around 0.5 MnT from 20.3 MnT in 2025.

In Indonesia, uncertainty remains regarding production prospects for 2026. Recent statements by the government indicate that the confiscation of illegally planted land will continue. Approximately 10% of the area devoted to palm cultivation has come under government control.

In the case of sunflower oil, the EU market remains extremely tight, with prices at their highest level since 2022 due to limited availability and persistent risks in the Black Sea. Prices have been supported by concerns over a possible slowdown in Ukrainian crushing and exports due to continued Russian attacks on production facilities, warehouses and export terminals. This is compounded by high logistics costs associated with military risks.

If a very good Argentine harvest is confirmed, this could provide some relief in terms of availability and price, although its impact on EU supply will be limited.

On the other hand, following the recent trade agreement between China and Canada, rapeseed oil production is expected to reach a record 33 MnT in the October 25/September 26 season, an increase of 0.9 MnT vs. the previous year. Consumption is also expected to increase by more than 1 MnTs, thanks to attractive price levels and the slowdown in global production of SBO, CPO and SFO. Abundant EU supplies are the result of strong import flows in recent months, against a backdrop where the EU biofuel sector also had to absorb large volumes of UCO (used cooking oil) towards the end of last year, temporarily reducing demand for rapeseed oil.

As regards lauric oils, coconut oil prices in Rotterdam continue to fall and are currently around 30% below the historical highs recorded in July 2025. The downward trend reflects improved production prospects and prior rationing of demand.

The CCNO is gradually regaining the market share lost in 2025, when global imports fell by more than 0.5 MnT due to supply shortages and high prices. Philippine exports remain sluggish but are expected to pick up in the second quarter as production recovers.

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: