Palm oil production and stocks have risen sharply in Indonesia and Malaysia and a recovery is also expected in Central America. Prices have adjusted downwards and are now more competitive against other oils, which is boosting demand. Rising palm exports in the next 3-4 months are expected to offset declining exports of sunflower and rapeseed oils.

On the other hand, South America’s record soybean crop ensures abundant supplies. Strong competition between palm and soybean is expected. There is great uncertainty regarding the future US biofuels policy, which may impact prices in one direction or the other.

Argentina’s sunflower seed crop has exceeded expectations by more than 600 kt, or the equivalent of 240 kt of oil. In addition, global production is expected to increase significantly in the 2025/26 season, as the planted area has increased by more than 1.3 Mn ha.

In rapeseed, heavy frosts together with the lack of precipitation in Ukraine could affect yields. Despite some beneficial rains in recent days, several regions in Germany, Poland and France still have below normal soil moisture, which is an element to follow in the coming weeks.

Lauric oil prices have soared recently, with coconut exceeding USD 2,700/tonne in Rotterdam and palm kernel premiums above USD 800/tonne. The severe drought in the Philippines in early 2024 has negatively affected production a few months later. A recent drop in prices has been observed as we enter the peak production cycle.

Below is a graph of the price evolution of coconut, palm kernel and palm over the last 15 years. Never before has the price differential between coconut and palm kernel reached these levels:

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: