Palm Oil Prices Projected to Hit $1,200 on Global Price Rally
Palm Oil Prices Projected to Hit $1,200 on Global Price Rally
The global palm oil prices have been projected to hit $1,200 per metric ton in 2025 from $900, according to a new report by Afrinvest West Africa.
Newera News learnt that this 33 percent surge is driven by surging crude palm oil (CPO) prices in Indonesia and Malaysia, the two largest global palm oil producers, and strong operational fundamentals.
The report attributes this to several factors, including expectations of firmer crude oil prices, which boost biofuel appeal; optimism over softening US-China trade tensions, which may support edible oil demand; and reduced supply due to the biofuel mandate programmes implemented by Indonesia and Malaysia.
“Despite the 16.3 percent decline to $900.0 per MT in the first five months of 2025, we foresee CPO’s price to grow, hovering around $1,200 per MT by year-end,” Afrinvest noted.
The report attributes this to several factors, including expectations of firmer crude oil prices, which boost biofuel appeal; optimism over softening US-China trade tensions, which may support edible oil demand; and reduced supply due to the biofuel mandate programmes implemented by Indonesia and Malaysia.
“Despite the 16.3 percent decline to $900.0 per MT in the first five months of 2025, we foresee CPO’s price to grow, hovering around $1,200 per MT by year-end,” Afrinvest noted.
Global CPO prices surged 36.2 percent year-to-year to $1,086/MT in 2024—the highest level since July 2022—due to Indonesia’s B35 mandate, El Nino-driven supply disruptions, and heightened demand as buyers switched from sunflower oil amid geopolitical tensions.
Unrest in Russia and Ukraine further disrupted over 70 percent of global sunflower oil exports last year, prompting consumers to shift demand toward CPO and creating additional price pressure across the edible oil market.
However, the price rally projection by Afrinvest creates an opportunity gap for Nigeria.
Alphonsus Inyang, president of the National Palm Produce Association in Nigeria, warns that Africa’s most populous nation’s reliance on Malaysia and Indonesia for its palm oil needs will be risky in the long term.
