CPOPC FORECASTS MODEST 2025 GROWTH IN PALM OIL PRODUCTION

KUALA LUMPUR, Feb 13 (Bernama) -- The Council of Palm Oil Producing Countries (CPOPC) forecasts an increase in palm oil production this year across Malaysia, Indonesia, Honduras, and Papua New Guinea compared to 2024 levels.

In its Annual Report Market & Outlook 2025, the council noted that although Indonesia's production is expected to recover, factors such as stagnating and declining yields, an increasing number of old and unproductive oil palm trees, and low replanting rates are likely to result in marginal growth in palm oil production.

The wet weather conditions experienced in the last quarter of 2024, moving into 2025 due to regional phenomena including monsoon and the persistence of the relatively mild intensity of La Nina, with a transition to El Nino-Southern Oscillation-neutral most likely by March to May 2025, may impact overall production.

“The uncertainties in weather conditions will play an important role in determining the production and yield of palm oil in 2025,” it said.

On the demand side, CPOPC expects strong palm oil demand this year, driven by higher domestic use in Indonesia for biodiesel, stock replenishment in major importers like China and India, and a limited supply of other vegetable oils like sunflower oil.

Palm oil demand set to rise

CPOPC expects palm oil demand to keep growing, driven by key importing countries in Asia, including ASEAN nations, and increasing demand in Africa, particularly in Egypt, Kenya, and Nigeria.

The council is also optimistic that palm oil will remain a favorable trade commodity in 2025 and continue to be priced at a premium over soybean oil.

“This is supported by a positive demand outlook, including the festive seasons, implementation of the B40 programme in Indonesia, lower stocks in producing countries and the seasonally low production in the coming months,” it said.

Hence, palm oil is anticipated to be traded in the range of US$1,000 per tonne to US$1,200 per tonne in the first quarter of 2025.

However, palm oil prices are expected to trade lower in the second half of 2025 due to the seasonally high-yielding production cycle and harvesting season for rapeseed and sunflower seeds.

Global biofuel industry poised for continued growth

According to Oil World data, the global production of biodiesel including hydrotreated vegetable oil (HVO) was 64.14 million tonnes in 2024, an 8.4 per cent increase against 59.18 million tonnes in 2023, with palm oil accounting for 33 per cent of total feedstock used.

CPOPC expects the global biofuels industry's positive growth in 2024 to continue into 2025 supported primarily by the increasing utilisation of sustainable aviation fuel (SAF) and biofuels mandates in key vegetable oil producers.

Indonesia and Brazil are set to continue enhancing the use of biofuels in their domestic mandates for biofuels.

“The continued sustainability initiatives for road transportation, aviation industry and the maritime industry are anticipated to support the growth of the biofuels industry globally,” the council said.

The report said the feedstock used for biodiesel production in 2025 is estimated to rise marginally with palm oil at 3.5 per cent followed by used cooking oil (1.5 per cent) and soybean (1.2 per cent).

-- BERNAMA