Palm Oil Poised for Annual Loss in 2025

Malaysian palm oil futures edged higher to hover around MYR 4,800 per tonne, heading for a fifth straight weekly advance of near 4% so far. Prices were supported by firmer edible oils in Dalian markets and elevated crude oil after U.S. President Donald Trump vowed continued strikes on Iran, boosting biodiesel-linked demand expectations. Export momentum added near-term support, with cargo surveyors estimating shipments surged 44%–57% from February. In Indonesia, the world’s top producer, official data showed palm oil exports recorded double-digit growth in February as the industry prepares for a higher B50 biodiesel mandate in July. Gains, however, were capped by weaker demand from top consumer India, where March palm oil imports fell 19% to a three-month low as refiners delayed purchases amid high prices. Caution also grew ahead of key data in China, another main buyer, with CPI and PPI due next week, along with monthly supply and demand data from the Malaysian Palm Oil Board.

Malaysian palm oil futures jumped about 1.5% to above MYR 4,800 per tonne, rebounding from earlier losses. Strength in Chicago soyoil and firmer crude oil prices, which improved biodiesel margins, underpinned the rally. Energy markets were supported after U.S. President Donald Trump, in a national address, pledged continued pressure on Iran’s energy sector without a clear timeline for resolution. On the demand side, cargo surveyors estimated that March palm oil exports surged between 44% and 57% from February, providing near-term support. However, gains were capped by a stronger ringgit and softer demand from top buyer India, with imports expected to ease to around 680,000 tonnes in March from 847,689 tonnes a month earlier. In Indonesia, the world’s largest producer, an industry association noted that biodiesel feedstock demand may reach 15 million tonnes this year, up 2 million tonnes, driven by the B50 rollout scheduled for July.

Malaysian palm oil futures hovered above MYR 4,850 per tonne on the first trading day of a new month, extending gains for a fifth straight session and reaching their highest level since December 2024. Strength came from firmer edible oil prices in Dalian and Chicago markets, alongside stronger crude ahead of U.S. President Trump’s address on Iran. The upside was further reinforced after Indonesia, a top producer, said it will raise its mandatory biodiesel blending rate to 50%, B50, from 40% starting July 1. In China, another main consumer, factory activity expanded for a fourth consecutive month in March, though growth slowed, according to a private survey. However, gains were capped by a stronger ringgit and expectations of softer demand in top buyer India, with March imports estimated at 680,000 tonnes versus 847,689 tonnes in February. Meanwhile, EU palm oil imports for the 2025/26 season beginning July slipped 2% year-on-year to 2.14 million tonnes, European Commission data showed.