Palm oil loses price edge to soybean oil as Malaysia’s China exports slide 39%
27/11/2025 (The Malaysian Reserve) - MALAYSIAN palm oil has become more expensive than soybean oil, which is a key alternative to edible oil in China, resulting in Chinese buyers naturally turning to cheaper substitutes for domestic consumption.
Plantation and Commodities Minister Datuk Seri Johari Abdul Ghani said the crude palm oil prices are consistently above RM4,200 and at one point trading at a premium of around US$120 (RM495.7) over soybean oil.
He shared that Malaysia’s palm oil exports to China have fallen by almost 39% in the first 10 months of the year, signalling deeper challenges beyond logistics and competitiveness.
“They said they don’t mind buying palm oil, but they want our palm oil to be cheap,” he said during the Malaysia-China Palm Oil Dialogue press conference today.
The recent drop in exports stressed the urgency for Malaysia to reassess how it competes in the Chinese market.
To address this, Johari advised Chinese buyers to consider longer-term purchase commitments, which could potentially allow Malaysian producers to offer better pricing.
He explained that discussions had already taken place with major Malaysian plantation companies, which collectively produce about 19.4 to 19.5 million tonnes annually, to explore the possibility of discounts tied to one-year supply commitments rather than spot purchases.
He said the closed-door dialogue was aimed at gaining candid feedback from major Chinese buyers, who collectively account for around 2.5 million tonnes of China’s palm oil demand, to understand how Malaysia could restore confidence and relevance.
The dialogue, Johari said, was also intended to explore ways to strengthen supply reliability, enhance product value and better support Chinese buyers across sectors such as food manufacturing, oleochemicals and renewable energy.
“These sessions serve as great platforms for us to engage openly, understand each other’s perspectives, and work together on practical solutions,” he said.
Johari said the ultimate goal was to reinforce Malaysian palm oil’s position as a secure, reliable and sustainable choice for China, while encouraging longer-term contracts, sustainability cooperation and two-way investments to support a resilient bilateral supply chain.
Looking ahead, he said Malaysia remains bullish on the palm oil sector into 2026, underpinned by its sustainability-focused approach, circular economy practices and growing downstream opportunities such as renewable energy and sustainable aviation fuel.
“I still think above RM4,000 (crude palm oil price) to be on the safe side,” he said.