Palm oil prices to rise by at least 5% in 2025 – forecast

According to a Reuters poll of traders, analysts and industry participants, benchmark palm oil prices will average 4,350 ringgit ($972.07) per tonne in 2025, up 5.4 percent year-on-year.

The forecast value is driven by an increase in Indonesia’s biodiesel blending mandate to the B40 category, which increases demand for palm oil and reduces palm oil exports. Reduced palm oil exports from Indonesia coupled with unfavorable weather in Southeast Asia is likely to contribute to higher prices. The government has previously announced that the blending mandate will increase to B50 by 2026 and diesel imports are planned to be phased out completely.

According to Intertek Testing Services, Malaysia’s palm oil exports during January 1-20 are estimated at 653,34,000 tons, down 22% from the corresponding period a month earlier due to weak demand amid higher prices compared to other competing oils.

According to USDA’s January report, an increase in the blending mandate to B40 is expected to increase Indonesia’s industrial palm oil consumption by about 1 million tons year-on-year to a record 14.5 million tons this season, reducing the amount of palm oil available for export. The average palm oil price in 2024 is 4,230 ringgit or $940 per ton compared to 3,832 ringgit or $832 per ton in 2023.

Tags: prices, palm oil