The oils and fats market in 2026 is being pulled in two directions at once. On one side, crop-level fundamentals, large harvests, record stocks in certain origins, and recovering production in lauric oils, point toward a more comfortable supply picture. On the other, the energy complex has injected a new layer of price support and volatility that fundamentals alone cannot explain.
Here’s what each market is doing heading into H2.
Olive oil is normalising after two highly volatile seasons. The International Olive Council estimates global production at around 3.4 million tonnes for 2025/26, roughly 4% below last season but still above historical averages. Higher opening stocks are partly offsetting the production decline. Prices are expected to hold broadly stable, with a sideways to mildly firmer trend through the remainder of the season.
Rapeseed oil prices have risen sharply, up to EUR 1,117/mt from EUR 1,030/mt in January, supported by higher Brent crude and firm competing vegetable oil values, despite comfortable European supply. The key bearish factor for Q2 and beyond is a projected increase in global rapeseed planted area and output. Harvest pressure is expected between June and September.
Soybean oil has been the most dramatic mover, with CBOT prices up to 65.33 US cents/lb from 48.56 US cents/lb at the start of the year. The driver is US biofuel policy: the market is pricing in higher domestic consumption mandates expected to be finalised in March. Argentine soybean oil has increased at a much slower pace, with the discount to CBOT widening to around USD 330/mt.
Sunflower oil prices have risen to USD 1,485/mt on tight supply and firm Brent crude. A striking trade flow development is the increase in Argentine sunflower seed shipments to Europe, running far above year-ago levels. Black Sea stock levels and the subsidence or continuation of the Middle East conflict are the key Q2 variables.
Palm oil has risen to USD 1,096/mt, but the anticipated supply tightening has not materialised. Malaysia is holding record stocks of around 2.7 mmt. Discussions around Indonesia’s B50 biodiesel mandate and the direction of the conflict are the variables to watch, with upside price risks appearing skewed toward H2.
Coconut oil and palm kernel oil have declined from their 2025 peaks, with the International Coconut Community forecasting a production recovery to 3.515 mmt in 2026, up from 3.155 mmt last year. Middle East logistics disruptions are adding near-term delivery costs. Average lauric oil price levels in 2026 are expected to remain below 2025.
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