This episode outlines key developments in the global palm oil market, covering production trends, policy impacts, trade flows, and strategic collaborations across key producing and importing countries.
- Malaysia: Palm oil futures recorded five consecutive sessions of gains, driven by strong export demand and robust performance of palm olein. Production rose by 3.51% in the first 20 days of May, with notable increases in Peninsular Malaysia (4.09%) and Sabah (4.52%). Exports surged by 24.6% month-over-month in April. However, ongoing concerns over compliance with the EU’s anti-deforestation regulation could present new trade challenges. Price softening is expected to persist through Q3 2025.
- Indonesia: The government adjusted the crude palm oil (CPO) reference price to USD 856.38/ton for June, aligning with broader global pricing trends. Additionally, Indonesia is partnering with Tanzania to expand palm oil cultivation, aiming to boost local production and reduce Tanzania’s dependency on imports. The initiative includes knowledge-sharing and technical capacity building.
- Pakistan: The country continues to face high edible oil import costs (over USD 5 billion annually) and insufficient domestic processing capacity. Authorities are advocating for increased investment in refining infrastructure and local market development to encourage domestic palm oil cultivation and reduce import dependency.
- Malaysia–China Cooperation: A new memorandum of understanding aims to strengthen palm oil supply chains in Western China, supporting expansion in trade, logistics, and downstream uses such as biofuels and sustainable products marked with carbon labels.
- India: Edible oil stockpiles have dropped to a five-year low due to reduced palm oil imports. This decline is expected to drive a short-term rebound in import volumes, particularly of palm and soybean oil, potentially increasing global price levels.
- Global Trends: Total production and trade volumes remain stable, but there is a growing movement to reshape palm oil’s global perception. Industry stakeholders are promoting a shift in narrative—recasting palm oil as a sustainable, economically inclusive commodity, comparable to olive oil in terms of cultural and environmental value.
