Thomas Mielke forecasts shortages and volatility in the vegetable oil market in 2025

The global vegetable oil market is entering a shortage phase due to reduced production and increased demand, threatening the global balance, said Thomas Mielke, Editor-in-Chief of OIL WORLD, at the GrainUkraine 2025 conference.

The production of palm oil, the world’s main oilseed crop, is declining due to structural problems. The shortage of palm oil is pushing up prices, while demand, especially from the biofuel sector, remains extremely high. In the MY 2024/25, global production of all vegetable oils will increase by only 1.8 million tonnes, which is significantly lower than the annual average of 5–9.5 million tonnes in previous years. This has already caused record stockpiles of eight major oils, increasing market volatility.

The shortage of palm oil opens up opportunities for other crops, including sunseed and rapeseed. Ukraine is forecasting 14 million tonnes of sunflower seeds and Romania 2.3 million tonnes of rapeseed in 2025. However, weather risks remain a key factor that could affect yields. At the same time, rapeseed and canola plantings in Canada, Australia and Ukraine have fallen to their lowest levels in four years, which will limit rapeseed oil supply in the 2025/26 season.

A significant share of global edible oil production – 20% – is used for biodiesel, and this share is growing. In 2025, the biofuel sector could consume an additional 3-4 million tonnes of oils, increasing competition between food, energy and industrial sectors. This puts additional pressure on markets where supply is already tight.

Global vegetable oil exports are also showing signs of decline. Falling production, logistical constraints and high prices are leading to shortages in key markets. According to Mielke, the situation will only worsen as the structural crisis in the oilseed market gains momentum.

“We see limited supply and explosive demand growth. The next season will be even more difficult,” stressed Thomas Mielke. He called on farmers, traders and processors to prepare for high price volatility and market risks in 2025.

This year will be a real test for oilseed market players, as decisions made in conditions of shortage and competition will determine their competitiveness in the new season.

Tags: Bulgaria, edible oils, export, rapeseed oil, soybean oil, Romania, EU, prices, Canada, Malaysia, Australia, sunseed, Ukraine, rapeseed, sunflower oil, palm oil