US-China deal will positively impact Malaysian palm oil market

The recent agreement between the US and China to temporarily reduce tariffs for 90 days will have a positive impact on the Malaysian palm oil market, CIMB Securities analysts believe. The reduction of US tariffs on Chinese goods from 145% to 30% and China’s tariffs on US imports from 125% to 10% reduces the risk of a global recession, contributing to increased demand for vegetable oils. Malaysia, as one of the world’s largest exporters of palm oil, stands to benefit from stronger global demand and higher crude oil prices, which support biodiesel production. CIMB Securities identifies IOI Corporation as a key player in the plantation sector that could benefit from these changes.

In addition, Malaysian palm oil producers maintain a competitive advantage in the US market, where Malaysian imports are subject to a 10% tariff, compared to 30% for Chinese products. According to MIDF Research, the revival of trade and production in the US and China over the next 90 days will support Malaysia’s export potential, including palm oil, contributing to the country’s economic growth in the second quarter of 2025. Malaysia’s ongoing negotiations with the US are expected to help minimize the risks of tariff increases, ensuring stable supplies and growing palm oil exports.

Tags: China, Malaysia, palm oil, USA