In April 2026, the domestic palm oil market exhibited a pattern of ‘volatility at high levels, a tug-of-war between bulls and bears, and a slight upward shift in the price centre’. At the beginning of the month, pressure from increased production in growing regions eased, causing prices to fluctuate and weaken; in the middle and latter parts of the month, growing expectations regarding the implementation of Indonesia’s B50 biodiesel policy, coupled with mounting concerns over reduced output due to El Niño, led to a rebound from the lows. By month-end, prices remained at elevated levels, with the market operating within a dynamic of “weak fundamentals” versus “strong expectations”.
I. Comparison of Customs Import and Export Data (January–March 2026)
According to data from the General Administration of Customs, imports across the palm oil industry chain exhibited a pattern of “increasing volumes and stable prices”, whilst export volumes remained modest, primarily comprising refined palm oil and its derivatives:
Palm oil (24°C refined): Cumulative imports from January to March totaled 1.385 million tons, compared to 923,000 tons during the same period in 2025, representing a year-on-year increase of 50.1%; Imports for March alone totaled 482,000 tons; a significant increase in import volumes was driven by a combination of falling prices from major producing countries and a recovery in domestic demand.
Import sources: Malaysia and Indonesia together accounted for over 95% of the total, with Malaysia accounting for 58% and Indonesia for 37%, indicating a concentrated supply structure.
II. Analysis of Southeast Asian Production and Domestic Capacity
(1) Production in Major Southeast Asian Producing Countries (April)
Malaysia: Entering a seasonal production increase cycle, crude palm oil output from 1–20 April rose by 17.52% month-on-month, with substantial increases across the Peninsular, Sabah and Sarawak regions; exports from 1–25 April fell by 16.8% month-on-month. The combination of increased production and weaker exports has heightened pressure on inventory build-up.
Indonesia: Production for the 2026/27 season is forecast at 48 million tons, a year-on-year increase of 3%. However, the B50 biodiesel policy (to be implemented in July) is expected to substantially boost domestic consumption, potentially reducing exports by 15–20%. With El Niño conditions expected to intensify, production in the second half of the year may decline by approximately 2 million tons.
(2) Domestic Production Capacity and Supply Landscape
In April, the utilization rate of domestic palm oil refining capacity remained at around 75%, with monthly refining capacity reaching 450,000 tons, a month-on-month increase of 3.2%. The supply landscape was characterized by “increased import arrivals, a decline from high inventory levels, and weak essential demand”: port inventories stood at approximately 680,000 tons, down 12.5% year-on-year but still at a high level for the same period; downstream demand from food processing and catering remained subdued, whilst the prices of substitute oils (soybean oil, rapeseed oil) were relatively low, strengthening the substitution effect and leading to cautious essential procurement.
III. Price Trends and Volatility (SunSirs Benchmark Price)
Palm oil prices fluctuated upwards in April, with increased volatility, before retreating slightly at month-end:
SunSirs Benchmark Price: 9,614 RMB/ton on 30 April, up 1.74% from 9,450 RMB/ton at the start of the month; the monthly high was 10,020 RMB/ton and the low was 9,280 RMB/ton.
IV. Logic Behind Upstream and Downstream Price Movements
Upstream Crude Palm Oil: The average price of Malaysian crude palm oil in April was 4,200 ringgit per ton, up 2.1% month-on-month. Prices were under pressure from increased production, but high crude oil prices supported its energy attributes, and coupled with expectations of Indonesian export restrictions, the scope for price declines was limited.
Palm oil: The core dynamics are “production pressure + high inventory levels” versus “biodiesel policy + weather expectations”. On the supply side, increased production in Malaysia and high domestic inventories are weighing on prices; on the demand side, the implementation of Indonesia’s B50 policy will lock in massive essential demand, whilst rising expectations of reduced output due to El Niño, coupled with high crude oil prices providing an energy premium, are supporting the price floor.
V. Price Outlook
In May–June, with production pressure persisting, biofuel expectations continuing and weather concerns intensifying, palm oil prices are likely to consolidate at elevated levels or rise slightly. Malaysia’s production expansion cycle continues, and pressure from inventory build-up remains; Indonesia’s B50 policy is nearing implementation, with market expectations continuing to rise; and heightened concerns over El Niño weather conditions are supporting the price floor.
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