The latest market data reveals significant price pressures across the oils and fats sector as macroeconomic factors and regional production shifts reshape the landscape.

US economic contraction weighs on commodity markets

The global oils and fats market experienced notable downward pressure in Week 19 as the US economy contracted by 0.3% in the first quarter of 2025. Market analysts attribute this unexpected contraction primarily to increased import activity driven by tariff uncertainties, creating ripple effects throughout commodity markets worldwide.

This economic setback has added to existing pressures on the energy sector, with Brent crude oil prices experiencing a substantial decline of nearly 7%. Prices fell from $64.79 per barrel to $60.23 per barrel over the same period last week, further compounded by OPEC’s clear intentions to increase oil production in the near term.

Southeast Asian palm oil markets show mixed signals

The palm oil sector faces its own set of challenges, with major data providers Bloomberg and Reuters estimating Malaysian ending stocks at the end of April to have increased by 15%, reaching 1.79 million metric tonnes. This substantial inventory growth stems from two key factors: rapidly accelerating production rates and significantly slower export growth than anticipated.

According to exclusive data provided to Vesper by Intertek, Malaysian exports in April grew by just 5.09% month-on-month, totaling 1.12 million metric tonnes – a figure well below market expectations and insufficient to offset the production increases.

Meanwhile, Indonesia – the world’s largest palm oil producer – is showing even more concerning trends. Data from a Vesper strategic partner indicates Indonesian exports in April plummeted by 31% to 1.2 million metric tonnes, based on vessel line-up data (which typically registers below official customs figures).

Market implications and future outlook

These developments signal potential volatility ahead for oils and fats markets as supply chain dynamics shift and macroeconomic pressures persist. The combination of US economic contraction, OPEC production increases, and Southeast Asian palm oil inventory growth creates a complex market environment requiring careful navigation.

For a comprehensive analysis including price forecasts, regional breakdowns, and strategic recommendations, Vesper users can access our complete Week 19 Oils and Fats Market Report on our platform or start your free trial here: https://app.vespertool.com/create-account