1. Weekly News

European Union

EU Regulatory Loopholes Fuel Fraudulent and Unsustainable Palm Oil Trade, EIA Warns

According to a new report by the Environmental Investigation Agency (EIA), loopholes in European Union (EU) regulations enable unsustainable and potentially fraudulent palm oil trade. The report highlights a surge in EU imports of palm oil-derived waste and residues used to produce biofuels, which are incentivized under the EU Renewable Energy Directive (RED) but largely exempt from the European Union Deforestation Regulation (EUDR).

Concerns arise that some imported waste products, such as palm oil mill effluent (POME), may be virgin palm oil from unsustainable sources, exploiting regulatory gaps. The EIA calls for urgent reviews of certification schemes under the RED, including biofuels in the EUDR, and stronger measures to prevent fraudulent palm oil trade.

Indonesia

Indonesia Backs Congo's Membership in CPOPC Amid Declining Palm Oil Exports

Indonesia has approved Congo's accession as a full member of the Council of Palm Oil Producing Countries (CPOPC), positioning Congo to become the first African nation to join the group. The membership is pending approval from Malaysia, Honduras, and Papua New Guinea. Indonesia's government views Congo's inclusion as a step toward strengthening CPOPC's global influence and fostering a more inclusive palm oil industry in Africa.

Previously an observer, Congo produced 2.2 million fresh fruit bunches across 340,000 hectares (ha) in 2023, employing 54,000 workers. This expansion comes as Indonesia faces declining palm oil exports, which fell 24.1% month-on-month (MoM) to USD 1.44 billion in Jan-25. CPOPC members remain critical of the EU's anti-deforestation regulations, which they fear could disrupt palm oil trade.

Indonesia's Sovereign Wealth Fund Danantara to Invest USD 50.5 Billion in Downstream Palm Oil and Agriculture Industries

According to the Agriculture Minister, Indonesia’s sovereign wealth fund, Danantara, will support the development of downstream industries for agricultural commodities, including palm oil and sugarcane. The government projects an investment of USD 50.5 billion (IDR 802.56 trillion) to enhance processing across 11 key crops, including palm oil, coconut, sugarcane, garlic, and cassava. This initiative aims to generate USD 261.9 billion (IDR 4.18 quadrillion) in added value and create 6.22 million jobs. This initiative aligns with Indonesia’s goal of achieving food and energy self-sufficiency by 2029.

Malaysia

Malaysia's Palm Oil Faces Weak Demand as High Prices Pressure Key Markets

Malaysia's crude palm oil (CPO) is losing demand from key buyers—India, the EU, and China—due to its sustained price premium over rival oils like soybean, according to Gleanuk Economics, an advisory firm specializing in the economics of crops, commodities, and their value chain. Feb-25 exports were the lowest since Feb-24, with CPO prices averaging USD 1,057.59 per metric ton (MYR 4,700/mt) year-to-date. Palm oil stock levels fell to 1.51 million metric tons (mmt), the lowest since Mar-22, due to weak output and increased domestic consumption, partly driven by Indonesia's export ban on POME oil.

TA Securities Holdings Berhad, a Malaysian-based brokerage and investment firm noted slower restocking ahead of Ramadan, suggesting Indian buyers may shift to cheaper alternatives. Meanwhile, Hong Leong Investment Bank (HLIB) expects CPO prices to decline from Q2-2025 due to ongoing supply pressure and increased edible oil production. Bank Islam Malaysia Berhad (BIMB) Securities, a Malaysian brokerage firm, forecasts elevated prices of USD 1,012.48 to 1,124.98/mt (MYR 4,500 to 5,000/mt) through Q1-2025, with a decline to USD 787.51 to 1,012.51/mt (MYR 3,500 to 4,500/mt) for the remainder of the year.

Malaysia's Palm Oil Stocks Hit 22-Month Low Due to Falling Production and Exports

Malaysia's palm oil stocks fell for the fifth consecutive month in Feb-25, reaching a 22-month low of 1.51 mmt, according to the Malaysian Palm Oil Board (MPOB). Due to flood-related disruptions, CPO production declined by 4.16% to 1.19 mmt, the lowest in three years. Exports dropped 16.27% to a four-year low of 1 mmt.

Traders suggest that declining stocks in Malaysia, the world's second-largest producer, may support benchmark futures, despite palm oil's price premium over soybean oil reducing demand from price-sensitive buyers. Stagnating output and Indonesia's biodiesel expansion could sustain elevated palm oil prices, narrowing its cost advantage over rival oils.

MPOC and OTAI Partner to Promote Malaysian Palm Oil Benefits in India

The Malaysian Palm Oil Council (MPOC) and the Oil Technologists’ Association of India (OTAI) have signed an agreement to promote Malaysian palm oil’s nutritional and health benefits in India. This partnership aims to enhance consumer awareness, support scientific research, and strengthen trade ties between the two countries.

The collaboration will focus on educational initiatives, industry engagement, and research to counter misconceptions and highlight palm oil’s role in food and non-food sectors. MPOC and OTAI plan to organize seminars, conferences, and academic programs while supporting research with Indian institutions to validate palm oil’s benefits. This initiative seeks to reinforce Malaysian palm oil’s position in India’s market and foster sustainable trade growth.

2. Weekly Pricing

Weekly Palm Oil Pricing Important Exporters (USD/kg)

Yearly Change in Palm Oil Pricing Important Exporters (W11 2024 to W11 2025)

Indonesia

Indonesia's palm oil prices have seen an increase, reaching USD 1.56 per kilogram (kg) in W11, marking a 0.65% week-on-week (WoW) and a 57.58% year-on-year (YoY) rise. This price surge is supported by a 62.2% MoMincrease in crude and refined palm oil exports, reaching a four-month high of 2.06 mmt in Feb-25. The rise in exports is attributed to an export tax reduction, which made Indonesian palm oil more attractive compared to Malaysian palm oil. Decreasing to USD 124/mt from USD 178/mt, the lower export tax helped shift buyer interest to Indonesia, contributing to Malaysia's export decline.

As Indonesia's palm oil exports continue to rise, stock levels are expected to remain stable, even with new restrictions on used cooking oil. The export increase, coupled with the country's mandatory 40% biodiesel blend, is expected to sustain palm oil prices despite its premium over competing oils like soybean oil. The growing export momentum, along with Indonesia's strong production capacity, will likely support palm oil prices in the short term, potentially keeping them elevated compared to rival oils, especially as demand for biodiesel continues to rise.

Malaysia

Malaysia's palm oil prices rose to USD 1.09/kg in W11, reflecting a 2.83% WoW increase and a 21.11% YoY rise. However, demand is weakening from major buyers such as India, the EU, and China, primarily due to Malaysia's price premium over competing oils like soybean oil. Exports in Feb-25 were at their lowest level since Feb-24, while palm oil stocks fell to a 22-month low of 1.51 mmt, driven by weak production and increased domestic consumption. Production decreased by 4.16% to 1.19mmt due to flood disruptions, and exports dropped by 16.27% to a four-year low of 1 mmt.

Despite reduced demand, declining stocks in Malaysia, coupled with stagnating output, and Indonesia's biodiesel expansion, may support future palm oil prices. However, the growing price gap between palm oil and soybean oil could limit the appeal of Malaysian palm oil to price-sensitive markets, affecting future price dynamics.

Thailand

Thailand's palm oil prices increased by 1.80% WoW in W11, reaching USD 1.13/kg, marking an 18.95% YoY rise. This price increase comes despite higher CPO production, which grew to approximately 2.9 mmt in early 2025, up from 2.75 mmt in early 2024. Weaker export demand from major buyers such as India and China, combined with the Thai government's policy to maintain high biodiesel stockpiles, restricted domestic consumption growth, exerting downward pressure on prices.

While increased production could support domestic supply, the limited growth in domestic consumption and reduced export demand may temper price gains, potentially stabilizing or even reducing prices in the near term. The government’s biodiesel stockpile strategy could further suppress market dynamics, keeping palm oil prices under pressure in the medium term.

3. Actionable Recommendations

Strengthen Palm Oil Certification and Regulatory Compliance

Given the concerns raised by the EIA regarding potential fraudulent palm oil trade through regulatory loopholes in the EU, stakeholders should advocate for a review and tightening of certification schemes under the EU RED and the EUDR. Palm oil producers and biofuel manufacturers should strengthen compliance with sustainability standards and work to close regulatory gaps that undermine environmental objectives. Strengthening certifications and auditing practices could mitigate the risk of unsustainable palm oil entering the market.

Diversify Export Markets and Enhance Global Trade Partnerships

As Malaysia’s palm oil faces declining demand from major buyers due to price premiums, palm oil producers should focus on expanding their reach in emerging markets such as Africa and the Middle East. Increased collaboration with CPOPC member countries, including Congo, and promoting palm oil’s nutritional benefits through strategic partnerships, like the MPOC-OTAI agreement, can help foster trade ties and reduce reliance on price-sensitive markets. Initiating targeted campaigns to raise awareness of palm oil's sustainability and health benefits could also support demand in these new regions.

Invest in Downstream Industry Development and Innovation

Indonesia's investment plans for downstream industries, including palm oil, signal an opportunity for growth in added value and job creation. Other palm oil-producing nations should consider similar investments in processing capacity, diversifying products beyond crude palm oil to include biodiesel, food products, and other value-added goods. By improving the efficiency and sustainability of palm oil production, these investments can enhance global competitiveness and reduce reliance on crude oil exports, which are sensitive to price fluctuations in the global market.

Sources: Tridge, UkrAgroConsult, The Jakarta Post, Indonesia Business Post