Kuala Lumpur, 17 June 2025 – Malaysia’s palm oil production rose 5.05% (+85,000 tonnes) month-on-month in May to 1.77 million tonnes, marking the highest output recorded for the month of May since 2015. This improvement was largely driven by favourable weather conditions for harvesting.
Meanwhile, exports exceeded expectation, surging 25.62% (+283,000 tonnes) to 1.38 million tonnes – outpacing production growth by 198,000 tonnes. The rebound was primarily contributed by robust demand from China and India, which collectively accounted for 28% of Malaysia’s total palm oil exports in May. This export momentum is expected to extend into Q3, supported by seasonal restocking demand and price competitiveness of palm oil.
On the supply side, production is likely to ease in the near term following two conservative months of strong output. Additionally, harvesting activities in June are also expected to decline due to fewer working days, as three national holidays and multiple state-level public holidays limiting estate operations.
The vegetable oil market remained broadly steady in June, fluctuating between RM3,800 to RM4,000, underpinned by a recovery in crude oil prices, from a low of USD55 in May to a high of USD77 in June, as well as easing U.S.-China trade tensions.
India’s recent cut in import duties on crude edible oils is expected to spur palm oil demand in the near term. The widened duty gap between crude and refined oils of 19.25% improve the price competitiveness of crude palm oil and is expected to lift Malaysian export volumes. In 2024, 82% of Malaysia’s palm oil exports to India were in crude form. Moreover, the reference price for palm oil in the second half of June was USD83 below soybean oil, offering Indian buyers a clear cost advantage.
Soybean oil prices have strengthened significantly since April and are trading at a premium of USD143 over palm oil in the European market, wider than the premiums for rapeseed and sunflower oil. The combination of relative price advantage and ample palm oil availability is expected to support a recovery in palm oil’s export market share in key destinations such as China, India and the Middle East.
The soybean oil price rally has been driven largely by U.S. biofuel legislation favouring domestically sourced feedstock and Trump administration’s proposal to allow oil refiners to blend more biofuel into gasoline and diesel in 2026. U.S. soybean oil consumption is also recovering, reaching a four-month high after a slump during the early Trump administration.
Despite elevated palm oil inventories, prices have remained resilient within a stable range, signalling a potential upward reversal. Downside risks appear limited in July, with Malaysian palm oil stocks expected to hover around 2 million tonnes amid strong exports and slowing output after robust production in April and May.
While the outlook remains broadly supportive, further price gains may be capped by the rising availability of soft oils. Global sunflower seed and rapeseed output is projected to increase by 8.1 million tonnes in the upcoming September-November harvest season. In addition, strong soybean production in 2025 is expected to result in large carry-over stocks into 2026.
Given these factors, Palm oil prices are expected to trade in the RM3,900 to RM4,200 range in June and July, supported by firm exports, improved price competitiveness against soybean oil and elevated crude oil prices.
About the Malaysian Palm Oil Council (MPOC)
The Malaysian Palm Oil Council (MPOC) is an agency dedicated to promoting Malaysia as a global leader in certified sustainable palm oil. MPOC focuses on positioning Malaysian palm oil as a healthy, sustainable, and ethical choice for consumers worldwide by engaging with stakeholders, improving market access, and promoting the MSPO certification. MPOC has a network of 8 regional offices in various international locations and plays a crucial role in expanding Malaysia’s palm oil industry by identifying and capitalising on market trends. The palm oil sector is a significant pillar of the Malaysian economy, contributing RM 105 billion in export earnings in 2023, making up 23% of the world’s palm oil production and 30% of total palm oil exports.
For more information on MPOC and Malaysian palm oil, visit www.mpoc.org.my
