Prices for lauric oils have declined from their 2025 peaks as the market awaits improved coconut oil supply. The International Coconut Community expects global coconut oil production to recover to 3.515 mmt in 2026, up from 3.155 mmt in the prior year. Crude palm kernel oil production could decline slightly, but this is expected to be offset by the increase in coconut oil output.
Despite this outlook, prices in Q1 2026 were higher than in Q4 2025, supported by stronger palm oil prices and a sudden increase in Brent crude prices linked to the Middle East conflict. CIF Rotterdam low-MOAH crude coconut oil prices declined from USD 3,000/mt in July to USD 2,250/mt in January, before rising to around USD 2,500/mt more recently. The Vesper Index for RSPO SG crude palm kernel oil (CIF Rotterdam) fell from a September peak of USD 2,370/mt to USD 2,130/mt in January, and has since rebounded to around USD 2,330/mt.
The Middle East conflict is currently making deliveries of lauric oils to Europe more expensive and time-consuming. In Q2, a seasonal recovery in palm kernel oil and coconut oil output, if it materialises, could put downward pressure on prices.
In Q3, palm kernel oil prices may begin to recover, though gains could be capped by lower expected coconut oil prices linked to the anticipated production recovery. Coconut oil prices in Q3 are likely to remain under pressure from strong production, though typhoon risks could introduce periods of volatility. In Q4, both oils may face upside price risks due to seasonally slower production. Overall, average lauric oil price levels in 2026 are expected to remain below those seen in 2025.
Read the full coconut oil and palm kernel oil market analysis in Vesper’s free Oils & Fats H1 2026 Market Outlook: https://vespertool.com/downloads/
