Global Palm Oil Market Summary

• Malaysia's palm oil production is forecast to decline slightly to 19.7 million tonnes in 2026 to 2027 as drier conditions associated with a potential El Nino event weigh on yields. Despite the modest production decline, planted area is expected to expand marginally. Domestic consumption is projected to increase to 4.59 million tonnes following the introduction of the B15 biodiesel program, helping offset lower production. Exports are expected to remain strong at around 15.9 million tonnes, while ending stocks are forecast to decline to 2.56 million tonnes. Strong demand from key importers, including India, China, and Kenya, is expected to support Malaysia's export outlook.
• The episode also explores Indonesia's phased implementation of the B50 biodiesel mandate. The policy is expected to redirect up to 4 million tonnes of crude palm oil each year from export markets to domestic biodiesel production, reducing export availability and potentially lowering export revenues. The effectiveness of the program will depend on the price relationship between palm oil and diesel, with potential adjustments to export levies required to support biodiesel subsidies.
• Nigeria remains heavily reliant on palm oil imports due to a significant gap between domestic production and consumption. Although the government is pursuing modernization initiatives, improved planting material, and policy reforms to raise production, long-standing challenges including aging plantations, land disputes, and low smallholder productivity continue to limit progress. The country remains exposed to higher import costs and tighter global supplies, particularly as Indonesia increases domestic palm oil consumption through its biodiesel program.