Very adverse weather has affected parts of Europe during the last three weeks. The combination of heat waves and lack of precipitation is expected to have a negative impact on sunflower yields. Within the EU, special attention needs to be paid to weather developments in France, Bulgaria and Romania.

In addition, the period from 1 to 29 June has been the driest in the main sunflower growing regions of Ukraine since 1981, endangering the crop. Crops are currently at a critical stage of development and soil moisture conditions have further deteriorated.

Forecasts point to well above normal temperatures and low rainfall in the coming days. As a consequence, the market has reacted with an increase in prices for the new season. High oil sunflower 2025/26 premiums have also appreciated significantly for the new season.

Below is a map of rainfall between 5 June and 5 July showing the absence of precipitation in most of Europe:

In palm oil, global production is increasing, not only seasonally, but also compared to the previous year. Combined production in Malaysia and Indonesia was significantly higher than in previous years in March, April and May.

The market therefore expects palm oil availability for export to remain ample in the coming months. World production is likely to increase by 1.6 MnT in 2026 vs. this year, reaching 83.7 MnT. Current weather conditions in Indonesia and Malaysia, which will strongly influence next year’s production, have been largely favourable. In addition, production in Central and South America is also expected to continue to recover in 2026.

Palm oil has continued to gain price competitiveness. The current CPO (FOB Indonesia) discount to Argentinean soybean oil is around USD 40/50/tonne. Since May, palm oil has re-established its discount to SBO after several months of unusually high premiums.

In lauric oils, the current shortage of coconut oil is expected to ease and potentially turn into a surplus during 2026 due to recovering production in the Philippines. Above-average rainfall in October-May and an expected rebound in yields are setting the tone for improved production in 2026. Production could reach 2 MnT in 2026, up from 1.6 MnT expected this year.

At the price level, coconut oil maintains its premium of more than USD 1,000/ton over PKO for the fourth consecutive week. The higher short-term supply of PKO is contributing to this price differential. However, CCNO’s improved production prospects in the Philippines are pressuring prices in the medium term.

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: