Palm oil markets are navigating a week of conflicting signals, with prices edging higher on fresh demand drivers even as a key buyer pulls back.

India imports slump sharply

India’s edible oil imports dropped 30% in June, with both palm and soybean oil purchases slowing sharply, according to industry data. The decline is the steepest in months, reflecting high domestic stocks and softer crushing margins. However, over the eight months to June, total imports still rose 7%, with palm oil’s share climbing to 48%.

This mixed picture suggests the June drop may be a temporary correction rather than a structural shift. Buyers are watching for any rebound in July-August shipments ahead of the festive season.

B50 mandate reshapes demand outlook

Indonesia has formally launched its B50 biodiesel programme, mandating 50% palm oil-based biodiesel blending. The policy is expected to boost domestic palm oil consumption significantly, with state media estimating savings of IDR 177 trillion and higher crude palm oil uptake. However, questions remain about supply adequacy. Indonesia’s industry ministry says current CPO output can support B50 this year, but higher production will be needed beyond 2026.

The mandate has already drawn attention from Malaysian producers, who could benefit if Indonesian supply tightens. Thailand has also tightened palm oil export controls, reshaping regional trade flows.

Exports and prices gain

Malaysia’s palm oil exports rose in the first half of July, supporting a second consecutive weekly gain in futures. Prices are also being lifted by firmer crude oil and soybean oil values, with the Middle East conflict reinforcing the link between energy and vegetable oil markets.

Despite a slight easing on Friday, palm oil remains on track for a weekly gain. The CPO market is expected to trade in the MYR 4,400-4,650/tonne range in July, according to the Malaysian Palm Oil Council, as supply tightens.

Takeaway for buyers

The key tension to watch is between India’s import slowdown and Indonesia’s B50-driven demand surge. Any further escalation in Middle East energy markets could amplify price support, while a sustained Indian pullback would cap gains. Monitor weekly export data and India’s import pace for directional cues.