- Palm oil export surge: Indonesia and Malaysia shipped 4.04 million tonnes of palm oil in January 2025, up 1.4 million tonnes year-on-year, driven by tighter Argentine soybean oil supplies.
- Demand rotation: India, China, and Egypt sharply increased palm oil imports, signaling substitution away from other vegetable oils, including Black Sea sunflower oil.
- Pressure on Black Sea margins: Improved palm oil price competitiveness is eroding Black Sea sunflower oil’s share in key markets and threatens exporter margins.
- EU price sensitivity: Higher EU palm oil imports despite sustainability concerns highlight price-driven buying that may cap Black Sea market gains.
Market Update
Combined palm oil exports from Indonesia and Malaysia reached 4.04 million tonnes in January 2025, a sharp increase of 1.4 million tonnes versus January 2024, according to Oil World data. The expansion reflects accelerating global demand as buyers capitalized on palm oil’s improved price competitiveness following reduced soybean oil export availability from Argentina.
January shipments saw strong growth into major destinations. India imported 706 thousand tonnes (up from 203 thousand tonnes in January 2024), China took 449 thousand tonnes (compared with 193 thousand tonnes a year earlier), and Egypt received 224 thousand tonnes (versus 130 thousand tonnes previously). The European Union also raised purchases to 264 thousand tonnes from 212 thousand tonnes year-on-year.
| Destination | Jan 2024 Shipments (000 t) | Jan 2025 Shipments (000 t) | Change (000 t) | Change (%) |
|---|---|---|---|---|
| India | 203 | 706 | +503 | +248% |
| China | 193 | 449 | +256 | +133% |
| Egypt | 130 | 224 | +94 | +72% |
| European Union | 212 | 264 | +52 | +25% |
| Total Indonesia & Malaysia | 2,640 | 4,040 | +1,400 | +53% |
For the 2025/26 marketing year to date (October–January), Indonesia shipped 9.54 million tonnes of palm oil compared with 7.99 million tonnes in the corresponding 2024/25 period. Malaysia exported 5.72 million tonnes, broadly unchanged from 5.76 million tonnes the previous season. China has emerged as a leading growth market with cumulative imports of 2.13 million tonnes, well above 1.41 million tonnes a year earlier.
| Exporter / Importer | Oct–Jan 2024/25 (mln t) | Oct–Jan 2025/26 (mln t) | Change (mln t) |
|---|---|---|---|
| Indonesia Exports | 7.99 | 9.54 | +1.55 |
| Malaysia Exports | 5.76 | 5.72 | -0.04 |
| China Palm Oil Imports | 1.41 | 2.13 | +0.72 |
Analysis
Bearish for Black Sea oilseeds. The acceleration in palm oil exports is directly challenging Black Sea sunflower oil competitiveness in key import markets. India and China, both major buyers of Ukrainian sunflower oil, have sharply increased palm oil purchases, signaling active substitution driven by price.
With analysts expecting sustained global palm oil demand amid tight supplies of alternative vegetable oils, Black Sea exporters face mounting pressure on margins and potential volume displacement. The EU’s decision to lift palm oil imports despite ongoing sustainability concerns further underscores the dominance of price in current buying behavior and highlights the risk that Black Sea sunflower oil will lose market share across multiple regions.
Traders should monitor whether persistent palm oil competitiveness accelerates a softening in vegetable oil freight rates from Black Sea origins, as lower export volumes and intensified price competition may weigh on shipping demand and FOB premiums.
Source: Market Data
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