InfoSAWIT, JAKARTA – Global palm oil supply in 2025 is expected to remain relatively ample. However, weak demand and intensifying trade tensions have created volatility in the global vegetable oil market, particularly in China, where speculation and bioenergy policies are playing a greater role in price movements.
This trend was highlighted by Ryan Chen, China CNF Business Director for Oils & Oilseeds at Cargill Investments (China) Ltd.
According to Chen, global palm oil production is projected to recover significantly in 2025, reaching around 70.6 million tons, up 4.6% year-on-year.
Indonesia and Malaysia remain the main contributors to global supply.
Malaysia’s production this year is projected to approach 20 million tons, although the actual output is estimated to range between 19.4 million and 19.9 million tons.
“This means the world has relatively sufficient palm oil supply this year. From the supply side, there is no shortage story,” Ryan said.
However, supply is only one part of the story.
Another major factor shaping the market is the disruption in global trade flows of U.S. soybeans and Canadian canola due to ongoing trade conflicts.
China, the world’s largest consumer of vegetable oils, imposed extremely high import tariffs.
U.S. soybean tariffs rose from 3% early in the year to 138% in April, effectively halting exports to China.
Although tariffs have since fallen back to around 13%, Brazilian soybeans remain more competitive with tariffs of only 3%.
A similar situation occurred with Canadian canola, where import tariffs on canola seeds rose to 85%, while tariffs on canola oil reached 109%.
As a result, canola trade flows from Canada to China have almost completely stopped.
The shifting dynamics of global vegetable oil trade are expected to continue influencing palm oil price movements in the coming years. (T2)
