Cooking Oil Markets Mid-2026: Palm and Sunflower Oil Pressures Shaping West African and Middle Eastern Supply Chains

The global vegetable oil market is moving through a period of sustained structural tightness in mid-2026. Two forces are converging: palm oil prices elevated by policy-driven demand and lingering climate effects, and sunflower oil squeezed by stagnant supply and ongoing geopolitical disruption. For importers and distributors operating across West Africa and the Middle East, understanding these dynamics is essential for sourcing strategy and pricing decisions in the months ahead.

Palm Oil: Policy and Climate Keep Prices Elevated

Benchmark crude palm oil (CPO) on Bursa Malaysia stood at 4,646 MYR per tonne as of mid-June 2026, reflecting a year-on-year increase of approximately 12.9%. Despite modest month-on-month movement, the underlying directional pressure remains upward.

The central driver is Indonesia's evolving biodiesel mandate. The country had been expected to implement a B50 blending requirement — a 50% palm oil blend in diesel — from July 1, 2026. The mandate has since been scaled back to B45 for 2026, with B50 now anticipated in late 2026. While this adjustment slightly eases near-term supply anxiety, it has not reversed prices, signalling that the market has already priced in the structural shift. As Fastmarkets has noted, trade and biofuels policies have become the two most critical determinants of palm oil pricing in 2026.

Shipment data reinforces this tightness: cargo surveyor records for June 1–15 showed palm oil export volumes rising between 9.6% and 23.8% compared to the equivalent period in May. India alone is expected to import more than 600,000 tonnes of palm oil in June, following 549,356 tonnes in May — a formidable volume that competes directly with supply destined for West African buyers. Additionally, lingering El Niño effects continue to weigh on production expectations in both Indonesia and Malaysia, offering little prospect of a supply-side correction in the near term.

Sunflower Oil: Stagnant Supply, Rising Import Costs

Sunflower oil tells a different but equally challenging story. Global production reached approximately 20.75 million metric tonnes in 2025/26, only marginally above the prior season's 20.38 million metric tonnes. This near-flat output trajectory — against a backdrop of persistent demand — is keeping prices supported with little near-term relief in sight.

Import costs for sunflower oil have surged around 25%, driven by higher freight rates, currency weakness in key importing markets, and logistics constraints. In February 2026, prices were reported at around $5,200 per metric tonne in the United States and $5,278 per metric tonne in Saudi Arabia. Futures rebounded toward $1,630 per tonne in mid-April as concerns over physical inventory levels intensified. The consequence for end markets has been direct: domestic prices in importing countries have climbed as much as 17%, dampening consumer purchasing and prompting cautious restocking behaviour — imports eased to around 1.2 million tonnes in March 2026.

The structural cause is well established. Ukraine remains the world's largest sunflower oil exporter, and the ongoing war continues to suppress its export capacity, with no realistic resolution in sight for the 2026 crop cycle.

Substitution Dynamics: West Africa and the Middle East

The price divergence between sunflower oil and palm oil is reshaping purchasing decisions across both regions. Palm oil's relative affordability is sustaining — and in some cases accelerating — its role as the default cooking oil for food manufacturers and household consumers across Nigeria, Ghana, Côte d'Ivoire, and neighbouring markets. In West Africa, where palm oil is already a dietary staple, elevated sunflower prices are reinforcing that preference rather than disrupting it. The risk, however, is that any further tightening of palm oil supply — particularly as Indonesia's B50 ambitions advance into late 2026 — could narrow the cost advantage that currently makes palm blends an attractive option.

In the Middle East, including the UAE and Saudi Arabia, similar substitution trends are visible across food service and manufacturing. The regional used cooking oil market was valued at USD 379.1 million in 2026 and is projected to reach USD 524.95 million by 2034, reflecting both growing consumption volumes and rising interest in recycling and biodiesel applications across the sector.

Takeaway for Importers and Distributors

The remainder of 2026 is likely to be characterised by sustained cost pressure across both palm and sunflower oil categories. Palm oil offers relative value but faces structural supply constraints from biodiesel mandates and competing demand from major importers like India. Sunflower oil supply growth is minimal, and import cost inflation is already feeding through to retail and food manufacturing budgets. Buyers who can lock in forward supply agreements or diversify across oil types will be better placed to manage margin volatility. Monitoring Indonesia's B45-to-B50 transition timeline will be particularly important as a leading indicator of palm oil price direction into Q4 2026.