This episode outlines significant developments in the palm oil sector.
- Malaysia’s palm oil futures rose by 1.7% to RM456 per metric ton, the highest since August, driven by market sensitivity to related commodity trends and tightening supply expectations. Declining stocks and production levels are expected to support continued price increases. The weaker ringgit and strategic government support have enhanced Malaysia’s competitiveness in export markets. The upcoming Palm Oil International Conference is expected to further consolidate Malaysia’s global position.
- Indonesia continues advancing its palm oil strategy through its B50 biodiesel program, slated for implementation in late 2026. This initiative aims to boost domestic crude palm oil consumption by 5.3 million tons, cut diesel imports, and enhance national energy security. A planned biofuel complex in Papua underscores the government's broader energy goals. However, trade tensions remain a challenge, particularly as the European Union appeals a WTO ruling favoring Indonesia. The EU’s evolving regulatory landscape, including the Renewable Energy Directive II and the forthcoming Deforestation Regulation, demands deforestation-free supply chains by 2026. These policies are already influencing EU palm oil imports, pushing suppliers to diversify their markets.
- In Pakistan, Malaysia is expanding its palm oil trade through the Malaysia Pakistan Closer Economic Partnership Agreement, emphasizing sustainable practices, halal product collaboration, and enhanced agricultural methods. These developments are supported by efforts to deepen aviation, tourism, and economic ties, reinforcing a multifaceted bilateral relationship.
