Growing demand for biofuels will lead to further increases in vegetable oil prices in 2026/27 – Thomas Mielke

The global vegetable oil market is experiencing a structural production deficit and growing demand in the biofuel market in the US and Indonesia, which will lead to further increases in vegetable oil prices in 2026 and 2027, noted renowned market analyst Thomas Mielke (Oil World, Germany) in a conversation with the German Association for the Promotion of Oilseed and Grain Cultivation (UFOP).

As Mielke reported, for the past four years, oil production has been low compared to growing consumption, and reserve stocks are relatively small, which keeps prices above average. After a relatively short period of falling prices, the vegetable oil market in US dollars has been growing since June. Oilseeds with a high oil content, such as rapeseed and sunflower, are benefiting, while soybean prices are under pressure due to a global crop surplus, which is also putting pressure on soybean meal and cake prices.

At the same time, according to the agency’s latest estimates, the average growth of global palm oil production by 2030 will be roughly halved compared to the previous decade, while demand remains high, especially in India and many African countries, due to above-average population growth.

Growing demand, including from the biofuels market in the United States and Indonesia, will also push up prices. Exports from both countries will decline in 2026, and exports from Malaysia are not expected to increase either.

Increased production and supply of soybean oil from South America and sunflower oil from Russia, Ukraine and Argentina will make an important contribution to world market supply, but this will not be enough. At the same time, Canada will increase its share of rapeseed oil production, and, therefore, reduce its access to available volumes of raw materials on the world market.

Rising vegetable oil prices are expected to support rapeseed prices in 2026 and lift them above current levels. In contrast to the relatively tight supply of vegetable oils, global meal and cake markets are expected to be in oversupply in 2026, assuming normal weather conditions in the main producing countries.

Despite an increase in rapeseed production in the European Union this summer, global supplies will remain relatively tight in June/July 2025/26. An expected overall decline in production of around 2 million tonnes in Ukraine, Canada and Australia, as well as tighter early-season stocks, will result in lower trade volumes and crushing of rapeseed, and therefore lower global rapeseed oil production and consumption, which will continue to support both raw material and finished product prices.

As a result, analysts expect rapeseed production margins to exceed grain production margins.

Tags: prices, rapeseed, edible oils, biofuel