Global edible oil market enters new season facing supply deficit risks

The global edible oil balance could tighten significantly in 2026/27. According to Oil World, combined production of the eight major edible oils is forecast to increase by only 1.7% to 237.2 mln tons, while consumption is expected to reach 237.6 mln tons. Supply growth will be constrained primarily by an anticipated decline in palm oil production, which higher output of other oils is unlikely to fully offset.

The market could become particularly tight in the first quarter of the new season. Expectations had centered on a larger sunflower crop and a recovery in sunflower oil supplies from the Black Sea region. However, production and export disruptions in Ukraine and Russia could keep shipments significantly below normal levels.

Importers will have to increasingly substitute sunflower oil with other edible oils, but the potential for such substitution is limited. Large volumes of soybean and rapeseed feedstock in North America and Europe are already being absorbed by the biofuel industry. At the same time, an expected decline in palm oil production and exports will further restrict alternative supplies.

Against this backdrop, growth in global edible oil consumption is forecast to slow to 2.3%, from 3.6% in the previous season. Oil World expects consumption to reach 237.6 mln tons, compared with 232.23 mln tons in 2025/26. Higher prices are expected to curb demand growth, although demand from the biofuel sector in Europe and North America will remain strong.

As a result, part of global demand will have to be covered by existing inventories. Global edible oil stocks are forecast to decline by 13.5% to 31.97 mln tons in 2026/27. Such a sharp drawdown in inventories would leave the market more vulnerable to supply disruptions and could provide additional support to global prices.

Tags: Ukraine, sunflower oil, prices, Black Sea region, edible oils, supply and demand balance