Gas and oil prices have soared since the start of the conflict in the Middle East. Any prolonged disruption to maritime traffic from the Persian Gulf will have a significant upward impact on the prices of energy, fertilisers and other raw materials.

As for the flow of raw materials between Asia and Europe, there is an additional concern: that shipping companies will avoid the Suez Canal and divert vessels around the Cape of Good Hope, which would increase transport costs and transit times for shipments bound for Europe.

CPO futures have risen in recent days, following movements in the energy markets and rises in soybean futures on the CBOT, against a backdrop of high volatility that has dominated the market. The rise in energy prices has improved the profitability of biodiesel, thereby increasing the appeal of biofuels. It is important to remember that 20% of global oil production is used for biofuels, with palm, soybean and rapeseed oils accounting for the largest volumes.

The Indonesian government’s growing intervention in the palm oil sector has so far had only a limited impact on export volumes, but is likely to affect production and export supply in the medium to long term.

The forecast for palm oil production in 2026 is slightly lower than for 2025:

Meanwhile, the increase in sunflower seed processing and exports is already helping to ease the global supply shortage. Around 600,000 tonnes of Argentine sunflower seeds are expected to reach the EU, backed by highly competitive prices. Phytosanitary controls are being closely monitored.

Currently, vegetable oil markets are heavily influenced by geopolitical events. Future developments in the conflict between Russia and Ukraine and the war in the Middle East will play a key role in price movements. The market will also be closely monitoring weather conditions and the progress of sowing in the coming weeks.

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: