This episode highlights the latest trends and policy developments in the global palm oil market as of September 7, 2025.
- Malaysia is intensifying efforts to achieve a low-risk classification under the European Union's deforestation regulation through its Malaysian Sustainable Palm Oil (MSPO) certification. This national initiative, mandatory since 2020, ensures traceability from plantations to refineries and underscores Malaysia’s commitment to sustainable, deforestation-free practices. Despite currently being classified as a standard-risk country by the EU, the nation’s traceability systems and forest governance have received positive recognition from European officials.
- However, Malaysia faces growing challenges from the spread of Ganoderma, a fungal disease impacting palm oil yields. This issue is especially pronounced in second-generation plantations and now affects approximately 13.7 percent of plantation areas. The zero-burning policy, which limits the removal of diseased biomass, has unintentionally facilitated the disease’s spread, particularly harming smallholders with limited resources to manage the infection effectively.
- Indonesia, meanwhile, has recorded a substantial rise in palm oil export revenue, reaching $14 billion from January to July 2025, a 32.9 percent increase year over year. This growth has contributed to a continued trade surplus over 63 consecutive months. Indonesia is not considered high risk under the EU regulation and has taken proactive steps to address trade challenges, including advancing biodiesel production. A favorable World Trade Organization panel ruling may lead to reduced tariffs on biodiesel exports. Both Malaysia and Indonesia are aligning with global sustainability standards through their national certification systems.
