Palm oil prices are expected to rise in the coming months, once the peak production period ends. By 2025/26, global production is forecast to increase modestly, to around 1.7 MnT.

The great concern generated by the Indonesian government’s confiscation of land (more than 1.5 MHa), together with the debate on the implementation of the B50 mandate (50% palm oil addition in biodiesel), further reinforces the bullish scenario. If this mandate comes into force, it will reduce Indonesian palm oil exports, adding pressure to prices.

On the other hand, global sunflower seed production in 2025/26 is expected to be 2 MnT lower than initial forecasts, due to crop losses in the EU, Russia and Ukraine caused by poor weather conditions. The market has gone from expecting a surplus a few months ago to the reality of a production deficit.

Yields per hectare in both Ukraine and Russia have been lower than last season and well below expectations in May-June. The delay in harvesting and extremely low sales by farmers are keeping the market at very high prices for the immediate future and with a very strong inverse.

In the case of soybean, prices have been under pressure following the temporary suspension of export taxes in Argentina and increased tensions between China and the US. However, the availability of soybean oil for export appears to be scarce in 2025/26, mainly due to increased domestic demand in the US and Brazil.

In the 2025/25 season, global consumption will exceed production and stocks will be tight. Below are details of the expected production and consumption of the 17 main oils and fats consumed globally (data from Oil World):

With regard to lauric oils, coconut oil prices have fallen from their historic highs reached in July, but remain well above average levels in recent years. A gradual recovery in production is expected during 2026, which is likely to exert downward pressure on prices; however, persistently low stock levels could delay this downward trend.

In the Philippines and Indonesia, coconut oil production competes with other coconut products (coconut milk and desiccated coconut). These markets tend to be more stable and attract consumers willing to commit to long-term contracts.

Palm kernel prices continue to trade at a significant discount to coconut. With the likely confirmation of a one-year delay in the implementation of the EUDR, PKO is expected to remain competitive with coconut throughout 2026. Market participants remain cautious, awaiting official confirmation of the EUDR postponement before adjusting their positions.

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: