Palm Oil Has Lost Market Share Due to Insufficient Growth in Production

Palm oil has lost market share due to insufficient growth in production. The average annual growth of world palm oil production slowed significantly to only 0.6% in the five years ended 2024 compared with an average increase of 5.3% per annum in the five years until 2019.

Palm oil is still by far the most important vegetable oil but its share of world production of 17 oils & fats dropped from 32% to 30% in the five years to 2024. ....

World Supplies of Palm Oil Still Tight in Jan/March 2025

World production of palm oil is forecast to recover in 2025 under the lead of Indonesia, following a decline by 2.5 Mn T last year. Supplies are seen remaining tight in Jan/March 2025....

Consumers in the importing countries will become more dependent on palm oil in April/Sept 2025 due to the prospective sharp declines anticipated for world production and exports of sunflower oil and rapeseed oil....

Deviating Trends in Crushings of Soybeans, Sunflowerseed and Rapeseed

In Jan/Aug 2025 world production of 10 seed oils is expected to decline by almost 0.9 Mn T on the year, reversing the sizable increase registered in Jan/Dec 2024 and raising global import dependence on palm oil....

Our markets will be influenced by some major supply changes in Jan/Aug 2025, partly contrasting with the developments registered in preceding months. We discuss the major changes in respect to oilseed crushings as well as production of vegetable oils and oilmeals in the Weekly of Jan 31....

Demand Rationing Has Occurred Only Partly So Far

Tightening supplies increasingly felt in sunflower oil market. Great uncertainty surrounding US biodiesel production....

Recent upward revisions in world production of soya oil contrasted with losses in sunflower oil. In sum, the anticipated growth in world production of 8 major vegetable oils is expected to be down sharply from preceding years....World consumption of the eight major vegetable oils is forecast to increase by only 2.5 Mn T this season, against 8.8 Mn T in 2023/24. The by far biggest increase will occur in soya oil, partly offset by sizable reductions shaping up in consumption of sunflower oil and rapeseed oil.... Latest OIL WORLD supply & demand estimates in the MONTHLY...

Argentine Crop Scare Providing Support

But world production of soya meal is still likely to exceed demand in Jan/Sept 2025, limiting any price increases.

Deteriorating Argentine crop conditions were the major reason for the recovery in soybean and soya meal prices in cash and futures markets in the week to Jan 23.The situation bears watching but there is still time for crop conditions to improve.....

World production of 7 other major oilmeals is likely to fall by 2.7 Mn T or 2-3% this season. Most of the setback is likely to occur in sunflower meal and rapeseed meal ... More details in the MONTHLY...

Import Demand for Rapeseed to Stay Elevated in 2025/26

European rapeseed production is likely to stay below potential in 2025, following lower than initially expected winter rapeseed plantings in key producing countries....

We tentatively forecast  EU-27 rapeseed production to recover to 19.1 Mn T in 2025, up 2.2 Mn T from a year earlier but still trailing the crops of 20.2 Mn T and 19.6 Mn T in the preceding two seasons....

 

Exports Diminish to 8-Year Low

World exports of palm oil declined by approximately 1.0 Mn T on the year to 12.7 Mn T in Sept/Nov 2024, an 8-year low. Indonesian exports alone plummeted by 1.3 Mn T, while Thailand and Central America recorded more moderate reductions, which were only partly offset by higher shipments from Malaysia.

Consumers in importing countries switched to more attractively priced other edible oils, primarily soya oil, in response to the appreciation of prices and reduced export supplies of palm oil...