CropGPT - Palm - Week 27

CropGPT - Oils

This episode presents a detailed overview of the global palm oil market as of July 6, 2025.

• In Malaysia, palm oil futures faced a downturn, pressured by weaker global edible oil prices and profit-taking activities. However, the benchmark September contract still registered a 1.67% weekly gain. Declining production and strong export demand are expected to reduce inventories for the first time in four months. Despite short-term price pressures, a 25% export surge in May, supported by a weakened ringgit, boosted competitiveness in foreign markets.
• Indonesia recorded a 53% increase in palm oil exports in May, reaching 1.88 million tons, driven by significant price discounts compared to alternative oils. This rise is expected to reduce inventories and potentially lift prices. Strong demand, particularly from India, contributed to higher export volumes and values between January and May. Indonesia is currently in its peak production season and aims to reach an annual export target of 25 million tons. To stabilize trade, the government has revised its crude palm oil benchmark price, which is intended to support consistent export duty structures.
• India continues to favor palm oil for its affordability, importing over 800,000 tons in June. The cost advantage over soya oil has reinforced palm oil’s role in India’s edible oil sector. Government efforts to enhance domestic commodity exchanges aim to align with global standards, although concerns about overregulation and its impact on market liquidity persist.
• Globally, the palm oil market remains highly sensitive to the prices of alternative oils like soybean and sunflower oil, as well as crude oil prices which affect palm oil’s competitiveness as a biodiesel feedstock. Geopolitical developments, trade policies, and environmental regulations further shape global trade flows and pricing strategies, introducing both volatility and opportunity for key stakeholders.