This episode presents a focused overview of the latest developments affecting the global palm oil market.

• In Malaysia, the palm oil sector is navigating new fiscal pressures due to the introduction of a 5% sales and services tax on raw materials, including crude palm kernel oil and palm kernel olein. Industry stakeholders, led by the Deputy Minister of Plantation and Commodities, are actively lobbying the Finance Ministry for a tax exemption on these inputs, arguing they should not be taxed like final consumer goods. The goal is to reduce production costs and enhance global competitiveness.
• Indonesia is facing reduced palm oil export projections, largely due to the B40 biodiesel mandate and decreased export demand. The USDA has lowered its 2024-2025 forecast to 22.8 million tons. However, domestic production is expected to rise by 3%, thanks to improved yields driven by favorable weather and adequate fertilization. Domestic consumption has also grown sharply, as the biodiesel blend increased from 35% to 40%, absorbing a greater share of national production.
• On the global stage, Malaysian palm oil prices remain volatile, shaped by both domestic policy and external forces such as crude oil prices and currency fluctuations. While lower crude oil prices have diminished palm oil’s attractiveness as a biodiesel feedstock, the weakened ringgit has helped ease costs for international buyers, though it has not reversed the overall price decline.
• In the United States, the Department of Agriculture has raised concerns about the implications of Indonesia’s reduced exports, highlighting the broader interdependencies of global commodity markets. Meanwhile, in Europe, Indonesia is pursuing stronger trade ties with the EU following favorable WTO rulings related to palm oil biofuel tariffs. These efforts are part of a broader strategy to improve market access amid ongoing global discussions on sustainable agriculture and deforestation.