News Capsule: El Niño May Reduce Palm Oil Output, Supporting Global Vegetable Oil Prices
29-Jun-2026 09:12 AM
News Capsule: El Niño May Reduce Palm Oil Output, Supporting Global Vegetable Oil Prices
★ El Niño is expected to reduce palm oil production in Indonesia and Malaysia by 8–10%, with total output in the two countries potentially declining by about 4.5 million tonnes. The lower production could tighten global vegetable oil supplies and support higher prices.
★ The supply outlook is becoming even tighter as Indonesia plans to implement its B50 biodiesel mandate from July 1, which is expected to consume an additional 3 million tonnes of palm oil domestically, reducing export availability.
★ Lower palm oil exports and stronger biofuel demand could provide price support to the entire vegetable oil complex, including canola, soybean oil, and other oilseeds.