Malaysia: Oilseeds and Products Update

Malaysia's palm oil sector is expected to face a challenging production environment in Marketing Year (MY) 2026/27 as industry stakeholders monitor the potential effects of El Niño-related dry weather conditions on oil palm fields. While production in MY2025/26 has remained stronger than anticipated, during the first eight months of the marketing year, weather-related challenges are expected to lead to moderate production growth in the following year. Meanwhile, domestic palm oil demand is projected to strengthen following the incremental implementation of Malaysia's B15 biodiesel mandate that has started on June 1, 2026, with the first full-year impact expected to be in MY2026/27. On the other hand, U.S. soybean oil prices have continued to rise and remain at a substantial premium to palm oil while palm oil's discount to Argentinean and Brazilian soybean oil is weakened, leading to a competitive global vegetable oil market.