09/02/2026 (The Edge Malaysia), Kuala Lumpur - Global edible oil markets have entered a volatile phase, as minor policy adjustments — such as shifts in import duties or biofuel mandates — trigger significant price swings. This trend poses a potential risk to Malaysia's largest palm oil buyer: India.

In a statement on Monday, the Indian Vegetable Oil Producers’ Association (IVPA) president Sudhakar Desai noted that geopolitical shifts and trade realignments have made prices more sensitive to policy changes and currency movements across the supply chain.

Desai, who is also the chief executive officer of Emami Agrotech Ltd, expects crude palm oil prices on Bursa Malaysia Derivatives to remain range-bound but heavily influenced by policy. He forecasts prices to hover between RM4,000 and RM4,400 from April to June, and rising to RM4,200-RM4,600 between July and September, as palm and soybean oil compete for global market share.

Desai flagged that even with sustained price premiums for soybean oil, palm oil demand in India could be capped. This is because Indian buyers are highly price-sensitive and tend to switch quickly to alternative oils whenever relative prices shift.

Furthermore, free trade agreements and bilateral arrangements — including those involving the US, EU, Australia, the United Arab Emirates and the South Asian Free Trade Area (Safta) members — are becoming increasingly important in determining sourcing decisions, as they directly affect landed costs and refining margins.

Production and supply outlook

Malaysia's palm oil production is projected to ease to 19.9 million tonnes in 2025–2026, from 20.2 million tonnes last year, according to Desai, partly due to slow replanting.

While near-term supply tightness may support prices, demand from key markets such as India is expected to remain price-sensitive.

“Edible oils are increasingly functioning as energy-linked strategic inputs rather than pure food commodities, raising the price floor and strengthening correlation with crude and policy cycles," said Desai.

On a global scale, production of the four major vegetable oils is projected at 208.4 million tonnes in 2025 to 2026, a marginal year-on-year gain. While palm and rapeseed oil outputs are increasing, sunflower oil production remains constrained, leaving global supply vulnerable to weather disruptions and policy shifts, said Desai.

Clearer and more predictable policy frameworks are needed to prevent excessive price volatility, he added, as edible oil markets become increasingly influenced by policy decisions rather than traditional supply-and-demand cycles.

https://theedgemalaysia.com/node/792283