Palm Kernel Oil Market Update: What's Shaping Prices in 2026

Palm kernel oil has moved into a stable-to-slightly-bullish phase through the first part of 2026, after a period of extreme volatility around 2022. A few of the key forces at play:

Tighter supply, firmer demand. Inventories in major producing hubs have been drawing down — Malaysian palm kernel oil stocks fell for a third consecutive month earlier this year, reaching a multi-month low, which has kept buyers active and supported prices.

Biofuel policy is adding demand pressure. Malaysia has been raising its biodiesel blending mandate, moving from a lower blend toward a higher one during 2026. Higher mandated blending pulls more palm-based oil into fuel use, tightening the volume available for food, cosmetics, and industrial buyers.

Prices are elevated but below the 2022 peak. Global average export prices in 2024 sat noticeably higher than the year before, but still meaningfully below the record highs seen in 2022 — the market has settled into a higher-than-historical-average range rather than returning to pre-2022 levels.

Production remains concentrated. Indonesia and Malaysia together account for the large majority of global supply, which means weather events, export policy changes, or logistics disruptions in either country can move global pricing quickly.

Regulation is starting to shape sourcing decisions. The EU’s deforestation regulation (EUDR), after being delayed more than once, is now expected to take effect toward the end of 2026 — buyers are increasingly factoring in compliant sourcing as part of their supplier selection, not just price.

What this means for buyers: locking in supplier relationships with transparent origin and compliance documentation now — rather than waiting until regulation takes effect — is likely to be the more resilient strategy heading into the second half of the year.

Sources drawn from recent industry market-intelligence reporting on palm kernel and palm oil pricing; figures are directional industry estimates, not Raholu-specific data.