Malaysian Palm Oil Output Surges In April As Analysts Eye Mid-Year Price Recovery

Malaysian palm oil production rose sharply in April, climbing by 298,000 tonnes from March, as the industry made up for harvest delays caused by the monsoon season in early March.

According to the Malaysian Palm Oil Council (MPOC), output is expected to see only moderate increases through September, largely due to the high base effect from the previous year.

The production surge also pushed stocks up by 303,000 tonnes to their highest level in six months, driven by weaker exports in March and April.

On the export front, Sub-Saharan Africa led growth with a 24% increase over the first four months of 2025, followed by ASEAN with an 8% rise, while shipments to other regions declined.

Price Outlook

The council said palm oil prices are expected to trade within a range of 3,750 to 4,050 ringgit per tonne in May, before gradually recovering.

It noted that vegetable oil and energy markets have seen sharp volatility over the past two months amid escalating US-China trade tensions and OPEC's decision to raise crude oil output starting in June.

These developments have weighed on market sentiment, the council explained, pushing palm oil prices down by 18% since April, while soybean oil prices rose by 7% and crude oil fell by 20%.

India and China Moves Boost Competitiveness

• India lowered effective duties on crude palm oil imports in May, making it $15 a tonne cheaper than soybean oil. This has strengthened palm oil's competitive position and is expected to lift import volumes at the expense of soybean oil.
• China has seen a significant improvement in palm oil's competitiveness. In December 2024, landed prices for refined, bleached and deodorised (RBD) palm olein were $260 a tonne higher than soybean oil, but by 16 May 2025 that gap had narrowed to just $1. The council expects this price parity to spur a recovery in China's palm oil imports during peak summer demand in June, even though Chinese vegetable oil stocks remain elevated at 1.76 million tonnes.

Biodiesel Sector Slowdown

The global biodiesel sector continues to struggle with weak margins, keeping blending levels at the minimum mandated thresholds in most regions.

• In the United States, biodiesel production fell 24% during the first two months of 2025 to just 2 million tonnes, down from 2.7 million tonnes in the same period last year. Feedstock consumption also declined across the board:
  • Canola oil: -57%
  • Soybean oil: -33%
  • Used cooking oil (UCO): -31%

Global biodiesel production is expected to fall by 1.7 million tonnes in 2025, with 1 million tonnes of that decline coming from the United States alone.

• In Indonesia, consumption held steady at 1.9 million tonnes in the first two months of 2025, a modest 2% increase year-on-year. Data for March and April suggests consumption is on track to meet the annual target of 13.7 million tonnes.

Outlook

Overall, the global vegetable oil market remains subdued, with no strong bullish catalysts in sight. Weak energy prices continue to weigh on biodiesel margins worldwide.

Global demand for vegetable oil imports is expected to shift in favour of palm oil between June and September, which could help limit further downward pressure on prices.