KUALA LUMPUR, 24 April 2026 — Malaysia’s palm oil stocks fell 16.1% to 2.26 million tonnes in March, as exports surged to 1.55 million tonnes against production of 1.37 million tonnes. The strong export performance was driven by front-loading ahead of rising shipping costs, alongside softer Indonesian exports following their pre-March rush to ship before the higher levy took effect.
Despite global headwinds, Q1 2026 exports rose 29.1% (+927,000 tonnes) year-on-year, with shipments improving across all regions, except the Americas. North Africa recorded the strongest growth at 94%, followed by South Asia (+74%), Other Europe and Central Asia (+47%), Asia Pacific (+24%) and Sub-Saharan Africa (+20%). Growth in the Middle East and EU27 was more moderate, at 8% and 1% respectively.
Since the West Asia conflict escalated on 27 February, vegetable oil prices have performed unevenly, with palm oil and US soybean oil rising 15-16% by mid-April, while sunflower oil, rapeseed oil and Argentine soybean oil recorded only marginal gains of 2-5%. Palm oil and US soybean oil have been the primary beneficiaries of pent-up biodiesel policy and demand, underpinned by elevated energy prices.
Rising vegetable oil demand for biodiesel blending in key exporting countries is expected to keep prices supported, as this would effectively reduce exportable supplies. US biodiesel production reached a 15-month high in March, and this momentum is expected to continue through the rest of the year, as US mandates record-high biofuel usage in 2026-2027.
Meanwhile, an estimated 1.0-1.5 million tonnes of palm oil in Southeast Asia are expected to be absorbed by stronger domestic demand in the second half of 2026. Malaysia would require an estimated additional 300,000 tonnes per annum under its B15 mandate, while Indonesia would need a further 3 million tonnes per year to fulfil its B50 mandate if fully implemented, although biodiesel producers may continue at B40 depending on capacity readiness.
Thailand’s move from B5 to B7 would require an additional 350,000 tonnes annually for blending. Adding to the supply tightness, the country has also tightened controls on CPO exports, with permits required for each shipment. In 2025, Thailand exported 1.3 million tonnes of palm oil, of which around 1 million tonnes went to India.
Energy security remains uncertain for global consumers, as damage to energy facilities in the Middle East could take months to repair and restore to full capacity. Energy prices are therefore likely to remain elevated in the medium term, with physical supply shortages persisting across most importing countries.
A similar price trend was observed during the Ukraine-Russia conflict in 2022, when crude oil prices stayed above USD90 per barrel for 5-6 months before normalising, providing sustained support to palm oil prices.
There is also a potential El Niño risk developing, which could provide additional price support. Malaysia has experienced reduced rainfall since mid-March, and according to the Malaysia Meteorological Department, these conditions are expected to persist until June.
Beyond these supportive factors, Argentine soybean oil has traded near parity with palm olein in April, as palm oil prices have risen more sharply than soybean oil year-to-date, potentially capping demand. Nonetheless, steep logistics costs from South America to Asia have kept palm oil competitive in key importing markets, with palm oil prices in India remaining approximately USD50 per tonne below soybean oil as of 17 April.
Looking ahead, crude palm oil prices are expected to remain supported at RM4,500 per tonne in the near term, underpinned by stronger biodiesel economics, elevated crude oil prices, and a potential El Niño development. However, further gains are likely to be capped by softer export demand amid inflation and weaker economic growth in key importing countries, alongside rising stocks as palm oil production gradually enters its seasonal peak.
For all media enquiries, please contact:
Kartigha Ayamanny, Assistant Manager, Sustainability, Promotions and Communication
Email: kartigha@mpoc.org.my
The Malaysian Palm Oil Council (MPOC)
The Malaysian Palm Oil Council (MPOC) is dedicated to promoting the global market expansion of Malaysian palm oil and its derivatives by enhancing its image and acceptance through technological innovation, economic value, and environmental sustainability, with a vision to position Malaysia as the world leader in certified sustainable palm oil. Through a strategic network of international offices in key markets – including China, India, the Middle East, Africa, and ASEAN – MPOC actively engages stakeholders, opens new market opportunities, and strengthens the global presence of Malaysian palm oil. As a cornerstone of Malaysia’s economy, the palm oil industry contributed RM 112.5 billion in export earnings in 2025. MPOC remains committed to driving sustainable growth and global leadership in the palm oil sector.
