Malaysia, the world's second-largest palm oil producer, has released export data for the first two months of 2025, revealing shifting demand patterns across key markets. While total export volumes fell compared with the same period in 2024, the sector recorded a sharp rise in revenue, reflecting evolving price dynamics and market strategies.
Key Data Highlights
According to data from the Malaysian Palm Oil Board (MPOB), total palm oil exports for January and February 2025 stood at around 2.20 million tonnes, down 7.4% from 2.37 million tonnes in 2024. However, total export value rose 18.9% to 11.38 billion ringgit (about US$2.44 billion), compared with 9.57 billion ringgit in 2024. This divergence reflects higher global palm oil prices and a strategic shift towards value-added products.
Trends By Country
- India: Malaysia's largest palm oil market saw a sharp 37.8% drop in imports, falling from 382,497 tonnes in 2024 to 237,826 tonnes in 2025. The decline underscores how sensitive the Indian market is to rising prices, with many buyers switching to other vegetable oils, chiefly soybean oil.
- Kenya: Imports rose 30.3% to 203,513 tonnes, up from 156,150 tonnes in 2024. Demand in Kenya for affordably priced vegetable oils and biofuels continues to grow, supported by strong trade partnerships with Malaysia across East Africa.
- Turkey: Imports climbed 24.6% to 172,075 tonnes, driven by the expansion of Turkey's food processing industry and efforts to stabilise commodity reserves amid persistent inflation.
- European Union (EU): Exports to the EU fell 27.5% to 159,722 tonnes, reflecting tighter deforestation-free supply chain regulations and reduced biofuel quotas for palm oil under renewable energy directive policies.
- Philippines: Imports surged 54.6% to 130,017 tonnes, supported by a booming food manufacturing sector in the Philippines and a recovery in hospitality industries following economic stabilisation in 2024.
Factors Behind The Trends
- Higher global prices: Crude palm oil prices held steady in early 2025 at around 4,800–5,200 ringgit per tonne, up from 4,000–4,300 ringgit in 2024. Weather factors, geopolitical tensions along major shipping routes, and tight global vegetable oil supplies all contributed to the increase.
- Indonesia's market dominance: Indonesia's continued dominance of volume-driven markets has pushed Malaysia to focus on premium buyers and niche segments, such as speciality fats and oleochemicals.
