A significant increase in the consumption of vegetable oils for biodiesel, of more than 6.5 MnT, is expected, reaching a total of almost 70 MnT by 2026.

• In Indonesia, the roll-out of B50 will increase domestic palm oil consumption by almost 1.5 MnT in 2026, bringing the total to 15 MnT.

• The conflict in the Middle East has accelerated biodiesel consumption in some countries.

• The US continues to increase its consumption of soybean for this application.

The chart below shows the increase in global production over the last 15 years:

This trend, which is pushing up vegetable oil prices, will lead to a rationalisation of demand in the food sector, affecting the most price-sensitive applications and consumers.

As regards palm oil, in Indonesia, the government’s confiscation of between 1.5 and 2 Mn Ha is causing considerable uncertainty. The forecast for CPO production in 2027 is 47.6 MnT, the lowest in three years, and yields are expected to fall by around 5%. A moderate decline is also expected in Malaysia in 2027, which could continue in subsequent years as replanting is not taking place at the rate needed to guarantee yields. Furthermore, the threat of a severe El Niño could result in production losses over the next 10–12 months, a situation already reflected in futures market prices.

In the case of sunflower, prices for the new crop have found support due to unfavourable weather conditions in some parts of the EU. France was the epicentre of the heatwaves in late June and early July, with temperatures ranging from 6° C to 10° C above normal and virtually no rainfall.

Sunflower crops in Spain and Hungary have also been affected. However, expectations of a significant recovery in production in Ukraine, Russia, Bulgaria and Romania are limiting the upside potential. HOSO premiums have reacted sharply to the adverse weather conditions in France, Spain and Hungary, Europe’s three largest producers of high-oleic sunflower.

Meanwhile, global coconut oil production is experiencing a sharp 7% increase this season, driven by heavy rainfall in the Philippines during the final months of 2025 and this year. This significant increase in production has led to a substantial recovery in global coconut oil stocks, triggering a marked downward trend in prices, which have fallen 30% below the all-time high recorded in June a year ago. It remains to be seen what impact El Niño will have on yields in 2027.

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: