EDIBLE OIL MARKET INFORMATION

December 20, 2025

Edible Oil Market Summary

Executive summary

• Global prices are softer vs. recent highs, with the FAO Vegetable Oil Price Index at a five-month low in November (165.0) as declines in palm, rapeseed, and sunflower oils outweighed a small rise in soyoil. FAOHome+1

• Palm oil is trading around the ~3,900–4,000 MYR/tonne area, pressured by demand concerns and inventories, while energy prices (a key biofuel linkage) remain relatively subdued vs. prior years. Trading Economics+2prestasisawit.mpob.gov.my+2

• Biofuel policy remains a major structural demand driver, especially Indonesia’s B40 program, supported by higher palm export levies to fund biodiesel. USDA Apps+1

• USDA’s latest balance sheet points to a well-supplied global major-oils market, with 2025/26 (Dec) production ~233.29 MMT, consumption ~227.94 MMT, and ending stocks ~29.82 MMT. USDA Apps

Price snapshot (benchmarks)

Note: Benchmarks vary by location/spec (crude vs refined), currency, and delivery terms—so spreads can move even if “headline” prices look flat.

Global supply–demand (major vegetable oils)

USDA’s latest Major Vegetable Oils balance (Dec 2025 update) indicates: USDA Apps

• Production (2025/26 Dec): ~233.29 MMT

  • Key components include palm ~80.02, soybean ~70.61, rapeseed ~35.65, sunflower ~19.99 (MMT). USDA Apps

• Domestic consumption (2025/26 Dec): ~227.94 MMT USDA Apps

• Ending stocks (2025/26 Dec): ~29.82 MMT USDA Apps

What this implies:

• The aggregate balance is not tight on paper; price direction is therefore highly sensitive to regional supply shocks, policy, and energy/biofuel economics rather than sheer global scarcity. USDA Apps+1

Key market drivers right now

1) Indonesia biodiesel pull-through (palm oil)

• Indonesia’s B40 mandate is a primary driver of domestic palm oil use; USDA notes 2025 allocations and progress on distribution. USDA Apps

• Indonesia also raised export levies on palm products to help sustain the B40 program. usda-indonesia.org

2) Energy prices & biofuel margins

• Softer crude prices and expectations of ample global supply reduce the “floor” that biofuel-linked demand can provide to veg oils. Financial Times+1

3) Black Sea dynamics (sunflower)

• Sunflower oil remains heavily influenced by Black Sea export flows; available spot indicators show levels around the low-mid $1,200s/tonne range recently/late-2025 depending on timing and terms. Cbonds+1

4) Substitution across oils

• The FAO notes November declines in palm, rapeseed, sunflower (with slight soyoil firmness), consistent with end-users switching based on relative values. FAOHome+1

Near-term outlook (next 4–8 weeks)

Base case: sideways-to-soft bias

• With the global balance relatively comfortable, prices may remain range-bound, with palm especially sensitive to Malaysia/Indonesia output & inventory signals and policy headlines. FAOHome+2USDA Apps+2

Upside risks (bullish):

• Weather/production disruptions (SE Asia palms; South America soy complex)

• Faster-than-expected biofuel demand uptake or policy tightening (esp. Indonesia) USDA Apps+1

Downside risks (bearish):

• Continued weak energy complex and/or weaker import demand

• Larger-than-expected near-term supplies, especially if palm output/inventories surprise higher FAOHome+2prestasisawit.mpob.gov.my+2

What to watch (practical checklist)

• FAO Vegetable Oil Price Index next release (directional signal for global basket). FAOHome

• Indonesia biodiesel/levy changes (direct impact on export availability). USDA Apps+1

• CBOT soyoil and Bursa Malaysia palm price spreads (substitution & trade flows). CME Group+1

• Black Sea sunflower FOB/CIF quotes (regional availability + freight).