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The global edible oil balance is expected to tighten markedly during the 2026/27 marketing year, as supply growth struggles to keep pace with rising demand. According to Oil World, combined production of the eight major edible oils is forecast to increase by only 1.7%, reaching 237.2 million tons, while global consumption is projected to climb to 237.6 million tons — a gap that would push the market into a structural deficit.
The anticipated decline in palm oil production stands out as the single most influential factor weighing on supply growth. Analysts expect overall palm oil output to contract during the new season, and higher production of other vegetable oils is unlikely to fully offset this shortfall, leaving the global market with limited room to absorb additional demand.
Tensions are likely to peak during the first quarter of the new season. Earlier expectations had centered on a larger sunflower seed harvest and a recovery in sunflower oil shipments from the Black Sea region. However, production and export disruptions in Ukraine and Russia are expected to keep shipments significantly below normal levels, constraining the availability of supply in international markets.
Importers will be compelled to step up the substitution of sunflower oil with other edible oils, yet the room for such substitution remains narrow. Large volumes of soybean and rapeseed feedstock across North America and Europe are already being absorbed by the biofuel industry, while a projected decline in palm oil production and exports will further restrict the availability of alternatives for buyers.
Against this backdrop, growth in global edible oil consumption is forecast to slow to 2.3%, down from 3.6% in the previous season. Oil World projects consumption at 237.6 million tons, compared with 232.23 million tons in 2025/26. Higher prices are expected to curb demand expansion, although offtake from the biofuel sector in Europe and North America is set to remain robust.
As a result, a portion of global demand will need to be met through drawdowns of existing inventories. Global edible oil stocks are forecast to decline by 13.5% to 31.97 million tons in 2026/27. Such a sharp reduction in stocks would leave the market more vulnerable to supply shocks and could offer additional support to international prices.
Source: UkrAgroConsult / Oil World