During Q1’26, palm olein prices showed an upward trend, primarily supported by strong downstream consumption rather than only feedstock dynamics. The rise in crude palm oil feedstock by ~6.90% in China and ~7.73% in India increased production costs, but demand-side pull played a key role in sustaining the trend. Palm olein demand improved across edible applications, especially in frying oils, instant foods, snacks, and bakery products, where it remained a preferred oil due to cost efficiency and stability. Increased activity in quick-service restaurants and food processing industries led to steady procurement, while household consumption remained consistent in key Asian markets. In India, strong edible oil demand and continued import reliance supported steady offtake, while in China, restocking by food manufacturers and higher consumption in packaged food segments strengthened demand. Tight supply from producing countries further supported the market, but it was the sustained demand from downstream food applications that maintained upward pressure.
Analyst Insight
According to Procurement Resource, palm olein prices are expected to remain firm, supported by tight feedstock availability and sustained demand from the food sector, although any improvement in production may moderate further increases.
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Palm Olein prices across Asian markets recorded fluctuating movement during the second half of 2025, shaped by shifting supply conditions, demand dynamics, and broader trade activity. The third quarter opened with a gradual upward trend, as production shortfalls in Malaysia and Indonesia, driven by seasonal patterns and weather-related disruptions, tightened available supply. Demand from key importing nations, particularly India, gained momentum as festive season consumption lifted palm oil import volumes to their highest levels in over a year. These factors collectively supported price appreciation through much of the period. Toward the close of the quarter, supply conditions began to ease as output from major producing regions recovered modestly, tempering further price gains.
The fourth quarter saw a marked reversal in market sentiment. Abundant arrivals from Southeast Asian origins created excess supply relative to prevailing demand, placing consistent downward pressure on prices across regional markets. Chinese markets, which had initially held at elevated levels, moved into a sustained correction as inventory accumulation weighed on buyer appetite. Prices reached their lowest point of the half-year period before a partial recovery emerged in the closing weeks, though overall levels remained below where the period had begun.
Analyst Insight
According to Procurement Resource, looking ahead, Palm Olein prices are expected to find gradual support as seasonal demand recovers and supply from key origins moderates.
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The study offers a detailed cost analysis of RBD Palm Olein Production via Milling, Refining, Fractionating. In addition, the report incorporates the manufacturing process with detailed process and material flow, operating costs along with financial expenses and depreciation charges.
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