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Palm oil at crossroads of global trade and domestic priorities: Bhavna Shah, VP, IVPA

The global palm oil market stands at an inflection point. After the highs seen in late 2024, crude palm oil (CPO) prices have softened modestly by April 2025, averaging around $1030 from the December 24 prices of $1200 per metric tonne. This adjustment has been driven by a temporary uptick in production across Malaysia and Indonesia, and by buyers exercising caution amid price tariff-driven volatility. Yet, the fundamentals reveal a more complex picture—one that demands the attention of traders, refiners, and policymakers alike.

Globally, the supply of palm oil remains tight despite recent production gains. Structural issues such as ageing plantations, limited replanting, and labour shortages continue to cap yield growth in major producing nations. Adding pressure on available exports is the continued diversion of palm oil into domestic biodiesel programmes —especially in Southeast Asia—where national mandates for B30 and B40 blending continue to absorb a significant portion of total output.
On the demand front, both edible and industrial applications are growing steadily. While palm oil remains a staple in the global food processing and HORECA sectors, its role in non-edible uses—ranging from oleochemicals to biofuels—is expanding rapidly. With demand showing resilience in key Asian and African markets, the long-term outlook for palm oil remains robust, although competition from soybean and sunflower oils, buoyed by healthy harvests, poses near-term challenges.

To read more, click on: https://agrospectrumindia.com/e-magazine

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