Vegetable oil prices recovered broadly last week, with palm and soybean oil leading gains on the back of firmer Brent crude and new biofuel policy developments in both the United States and Indonesia. Rapeseed and sunflower oils followed, while coconut oil moved in the opposite direction amid biodiesel policy uncertainty in the Philippines.

Palm oil bounces from weekly low

BMD crude palm oil prices rebounded from $1,072/mt to $1,160/mt, supported by firm crude oil prices, Indonesia’s B50 biodiesel mandate, and supportive supply and demand fundamentals.

Brent crude closed at nearly $113/barrel, up from $99 the previous week, amid deteriorating diplomatic relations between the U.S. and Iran and rising concerns over potential damage to energy infrastructure.

Indonesian President Prabowo Subianto confirmed on Monday that the B50 biodiesel mandate will proceed this year. Official testing was initially expected to conclude in June but may be brought forward. Indonesia has installed biodiesel capacity of 22 million kilolitres and effective annual production of around 17.6 million kilolitres, which would be sufficient for B50 implementation in the second half of the year but not for the full year. Some market participants expect a more realistic blend of B45–B47 to be achieved across 2026, while full-year B50 remains a 2027 target.

In Malaysia, palm oil production for 1–20 March declined by 5.94% compared to the same period last month, while exports for the full month of March are estimated to have increased by 40–50%, which is expected to contribute to a reduction in stocks.

U.S. finalises biofuel mandates, supporting soybean oil

CBOT soybean oil strengthened from 65.58 to 68.47 US cents/lb, supported by firm crude oil prices and the finalisation of U.S. biofuel policy.

The U.S. finalised the “Set 2” rule, setting the highest biofuel blending requirements in the programme’s history. Total Renewable Volume Obligations are set at 80.51 MMT for 2026 and 81.14 MMT for 2027. The Environmental Protection Agency also implemented a 70% partial reallocation of Small Refinery Exemption volumes from 2023–2025 into the new mandates to prevent demand erosion.

Market participants noted the announcements were broadly in line with expectations and not perceived as strongly bullish, though they remain fundamentally supportive.

FOB Argentina crude soybean oil prices increased to $1,230/mt from $1,163/mt over the same period.

Rapeseed and sunflower oils follow broader market

Rapeseed oil prices moved higher, tracking movements in competing vegetable oils driven by firm crude prices and biofuel policy developments. Despite the near-term price recovery, the fundamental outlook for rapeseed remains bearish. Oil World expects global rapeseed planting area to increase by more than one million hectares in 2026, with average yields in the EU-27, Canada, and Australia projected to remain relatively high.

Ukraine is expected to export around 576,000 mt of rapeseed oil this season, 2.7 times higher than last season, which helps explain higher EU rapeseed oil imports this season alongside reduced rapeseed imports.

Sunflower oil gained slightly more support than rapeseed oil following news that a third Argentine shipment inspected in Argentina did not meet EU food safety standards. In total, around 120,000 mt across multiple shipments are now considered suitable only for biodiesel or re-export, giving Black Sea sellers more confidence to hold firm on pricing.

Despite this near-term support, the fundamental outlook for sunflower oil is also bearish. Oil World forecasts global sunflower production in 2026 to increase by 5.7 MMT to 62.3 MMT, while Strategie Grains expects an even larger rise to 64.45 MMT.

Coconut oil weakens; palm kernel oil holds firm

Coconut oil prices declined, following weakness at origin. The move reflects concerns among Philippine biofuel producers over a potential increase in government-approved biofuel imports and a possible suspension of blending mandates.

Palm kernel oil prices increased, supported by firm crude palm oil prices and expectations of slightly lower production this year.

Olive oil holds steady into Easter

Extra virgin olive oil prices remained stable. Producers maintained a firm non-selling stance during the final week of March contract negotiations.

Competitive pressure from other origins continues, with Tunisian operators offering extra virgin olive oil at around €3.70–3.75/kg compared to Spanish prices of €4.30–4.90/kg.

Looking ahead, the 2026/27 harvest will be a key price factor. Olive trees are approaching flowering, dryland areas have had a recovery year, and subsoil moisture levels remain high. As long as supply remains stable and the flowering period does not trigger a market overreaction, prices are expected to hold relatively steady.

For the vegetable oil outlook, read our Oils & Fats H2 outlook report for free: https://vespertool.com/download/oils-fats-h2-2026-market-outlook/