Slower growth in global vegetable oil production and rising consumption, particularly from the energy sector, are expected to tighten supplies in 2026/2027. Oil World projects global palm oil exports could decline by 2.5 million to 3.5 million tons in 2027, potentially putting upward pressure on international vegetable oil prices.
PALMOILMAGAZINE, NUSA DUA – Global vegetable oil supplies are expected to tighten further in 2027 as production growth slows while worldwide consumption continues to increase. The resulting supply-demand imbalance could reduce inventories and support higher vegetable oil prices in international markets.
Thomas Mielke, Executive Director of Oil World, outlined the outlook during the 22nd Indonesian Palm Oil Conference and 2027 Price Outlook (IPOC 2026), held in Nusa Dua, Bali.
According to Mielke, global vegetable oil production is projected to increase by less than 4 million tons in the 2026/2027 season. Meanwhile, demand continues to expand, particularly from the energy sector, which currently accounts for approximately 33% of global oils and fats consumption.
“We are entering a period of global production deficits. Stocks will decline throughout 2026/2027, while prices will need to rise to bring consumption in line with available supplies,” Mielke said, as quoted by PalmOilMagazine from InfoSAWIT on Saturday (November 14, 2026).
He forecast that global palm oil exports could decline by approximately 2.5 million to 3.5 million tons in 2027. This would extend the weakening trend in global palm oil exports that has continued since shipments peaked in 2019.
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One of the key factors shaping the outlook is Indonesia’s rising domestic palm oil consumption. Mielke expects Indonesia’s domestic consumption could exceed its export volume for the first time.
If this scenario materializes, importing countries could face greater challenges in securing alternative supplies from other vegetable oils to compensate for reduced palm oil availability.
Alternative Vegetable Oils Continue to Expand
Despite the slowdown in palm oil exports, production of soybean oil, sunflower oil, and rapeseed oil continues to grow. Over the past seven years, exports of these three vegetable oils have increased by approximately 8 million tons.
Mielke noted that soybean, sunflower, and rapeseed cultivation areas have expanded by approximately 41 million hectares over the same seven-year period, compared with an increase of around 2.7 million hectares in global oil palm plantation areas.
Also Read: Black Sea Sunflower Oil Disruptions Push India to Buy More Palm Oil
Nevertheless, expanding production of alternative vegetable oils does not necessarily guarantee uninterrupted global supplies.
Geopolitical tensions in the Black Sea region, for example, continue to disrupt sunflower oil exports from Russia and Ukraine, affecting an estimated 250,000–300,000 tons of shipments per month.
Mielke highlighted geopolitical developments, weather conditions, and biodiesel policies as key factors that will influence the global vegetable oil market balance in 2027.
Also Read: Indonesia Sets November 2026 Biodiesel Price at IDR 14,312 per Liter, Excluding Transport
With inventories expected to decline while consumption continues to rise, international vegetable oil prices could face upward pressure. However, the extent of any price increase will depend on developments in production, international trade, and energy policies across major producing and consuming countries. (P2)
