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Trade4go
Apr 4th, 2025
Original content
The European Union's (EU) palm oil imports fell sharply between Jul-24 and early Mar-25, totaling just under 1.9 million metric tons (mmt), down from 2.4 mmt in the same period the previous year. This decline reflects reduced intra-community consumption and the ongoing phase-out of palm oil-based biofuels under the EU Renewable Energy Directive (RED II). The top suppliers, Indonesia and Malaysia, saw shipments drop by 23% and 30%, respectively, while Papua New Guinea was the only country to slightly increase exports. The Union for the Promotion of Oil and Protein Plants (UFOP) attributes the drop to tightening biofuel regulations and an increase in biodiesel availability, particularly in Germany, where exports rose from 1.27 mmt in 2023 to 1.62 mmt in 2024.
Colombian palm oil exports are projected to decline to 420,000 metric tons (mt) in 2024/25 due to rising domestic biodiesel demand, despite increased production and planted area, according to the United States Department of Agriculture (USDA). The 12.5% blending mandate introduced in 2024 reduced exportable volumes, with Colombia’s export share dropping from over 40% in 2018/19 to just above 20% in 2023/24. While exports to Mexico have increased amid lower Canadian rapeseed oil shipments, Colombia’s market share in the EU has declined due to reduced palm oil consumption.
Indonesia's palm oil inventory increased by 13.98% month-on-month (MoM) at the end of Jan-25, despite a slight drop in production. The world's largest palm oil producer, Indonesia exported 1.96 mmt of palm oil products, including refined oil and oleochemicals – a30% decline from the same period last year and a four-month low. Exports fell due to lower demand from key markets, such as India, China, and Pakistan. Jan-25's crude palm oil (CPO) production was 3.83 mmt, slightly down from 3.88 mmt in Dec-25.
The Indonesian Palm Oil Association (GAPKI) warned that CPO production could decline in 2025 due to the transfer of oil palm plantation management to state-owned Perseroan Terbatas (PT) Agrinas Palma Nusantara. Transition period delays could hinder maintenance and fertilization activities, impacting production volumes in the second half of the year. Agrinas is set to manage 1 million hectares (ha) of palm oil plantations, including 221,000 ha previously controlled by the Duta Palma Group. The government plans a capital injection of USD 478.36 million (IDR 8 trillion) to support the project, although funding will now be channeled through the Daya Anagata Nusantara Investment Management Agency rather than the state budget.
In Feb-25, Peruvian palm oil exports totaled 11,457 mt, valued at USD 12.6 million. This marked a 19% decrease in volume and a 5% decline in value compared to Feb-24, despite higher palm oil prices. The average price rose 18% to USD 1.10 per kilogram (kg). Shipments were primarily crude oil (64%), refined oil (30%), and processed palm (6%). The main export markets were Mexico with 38%, Chile with 22%, and Ecuador with 13%, with Mexico remaining the largest buyer.
The Malaysian Palm Oil Board (MPOB) has confirmed that the export duty for CPO will remain at 10% in Apr-25, with the benchmark price at USD 1,045.99/mt (MYR 4,547.79/mt), from USD 1,108.07/mt (MYR 4,390.37/mt) in Mar-25. The export duty rate begins at 3% for CPO priced between USD 503.57 to 537.13/mt (MYR 2,250 and 2,400/mt), reaching the maximum 10% rate when prices exceed USD 906.37/mt (MYR 4,050/mt). Palm oil exports from Malaysia decreased to 381,790 mt from March 1 to 15, down from 422,430 mt in the same period of Feb-25, attributed to lower demand from key importers. However, experts expect stable palm oil prices, with emerging markets in Africa offsetting the reduced demand.
In W13, Indonesia's palm oil prices dropped to USD 1.34/kg, a 12.42% week-on-week (WoW) decrease, despite a 32.67% year-on-year (YoY) increase. Jan-25 saw declines in production with a decrease of 1.25% from Dec-24 and exports down 5% from Dec-24, with a sharp 43.58% drop in CPO exports. However, ending stocks rose to 2.936 mmt, potentially putting downward pressure on prices. While reduced demand from key markets like India and China affected exports, growth in shipments to the EU and Africa may help stabilize the market. The overall price outlook remains uncertain, influenced by the balance between surplus stock and shifting export demand.
Malaysia's palm oil prices fell to USD 1.05/kg in W13, down 0.94% WoW, amid weaker demand from key buyers like India and China and increased competition from abundant, lower-cost soybean oil. However, prices remained 14.13% higher YoY, supported by steady exports to emerging markets in Sub-Saharan Africa. The Malaysian Palm Oil Council (MPOC) projected prices to range between USD 994-1,039/mt in Mar-25. While India's shift to soybean oil has pressured palm oil demand, its need to replenish stocks could drive imports higher, potentially stabilizing prices in the near term.
In W13, Thailand's palm oil prices rose to USD 1.11/kg, an increase of 0.91% WoW, despite increased CPO production, which reached 2.9 mmt in early 2025, compared to 2.75 mmt in early 2024. Higher output has bolstered domestic supply, but weaker export demand from key buyers like India and China, along with government policies to maintain high biodiesel stockpiles, have curbed consumption growth, limiting price increases. While rising production supports supply, subdued demand, and continued biodiesel stockpiling could exert downward pressure, potentially stabilizing or softening prices in the medium term.
With EU demand declining due to RED II regulations, exporters in Indonesia, Malaysia, and Colombia should strengthen trade ties with emerging markets in Africa, Latin America, and the Middle East. Targeting these regions with competitive pricing and tailored marketing strategies can help offset losses in traditional markets.
Given increasing biodiesel mandates in Colombia and surplus stocks in Indonesia, palm oil producers should advocate for higher domestic blending requirements or incentives for biodiesel adoption. Strengthening local demand can stabilize prices and reduce reliance on volatile export markets.
With Indonesia’s rising stock levels and potential production disruptions, industry players should implement stricter inventory control, streamline logistics, and explore alternative storage solutions. Reducing excess supply can help prevent further price declines while maintaining export flexibility.
Sources: Tridge, Ukr AgroConsult, Agraria
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