Palm and Sunflower Oil Markets: Key Price Drivers and Demand Signals for West Africa and the Middle East, H2 2026

The global vegetable oil market is entering the second half of 2026 under a convergence of structural demand shifts and supply-side risks that are reshaping procurement decisions for importers and distributors across West Africa and the Middle East. Both palm and sunflower oil markets carry firm pricing momentum, but the drivers — and the risks — are distinct for each commodity.

Palm Oil: Prices Climbing on Multiple Demand Fronts

Benchmark palm oil on the Malaysian market reached 4,683 MYR per tonne on 30 July 2026, reflecting a month-on-month gain of 2.77% and a year-on-year increase of 10.32%, according to Trading Economics. Malaysian export volumes for the first 25 days of July rose between 8.1% and 15.9% compared to the same period in June, signalling robust near-term offtake.

The most consequential demand driver is Indonesia's B50 biodiesel mandate, launched in July 2026, which has pushed the country's 2026 palm oil-based biodiesel allocation to 16.75 million kilolitres. This represents a structural diversion of palm oil volumes away from food markets and into the energy sector, tightening global supply available for importers.

At the same time, India — the world's top palm oil buyer — is expected to accelerate purchases between July and October ahead of its festive season, adding further upward price pressure during precisely the period when procurement decisions for Q4 are typically finalised.

One partially offsetting factor is a sharp contraction in European demand: EU palm oil imports for the 2026/27 marketing year have fallen 39% year-on-year, removing a historically significant demand centre. However, this relief for buyers may be outweighed by the supply uncertainty surrounding Indonesia's transfer of 1.5 million hectares of palm plantations to state-owned entity Agrinas Palma Nusantara. OilWorld analyst Thomas Milke has warned that Malaysian RBD palm olein — then around USD 1,080 per tonne FOB — could rise by more than USD 150 per tonne if those plantation management changes negatively affect Indonesian output.

Sunflower Oil: Ukraine Crop Shortfall Sustains Firm Outlook

Sunflower oil has followed a distinct but equally firm price trajectory. Globally, average prices rose from USD 1.142 per kg in Q1 2026 to USD 1.211 per kg in Q2, a 6.0% gain. For H2 2026, Expert Market Research forecasts a range of USD 1.22–1.38 per kg, with firming driven by Middle East and Black Sea supply disruptions and growing biofuel demand.

The core supply concern is Ukraine's sunflower harvest. Estimates for the 2025/26 crop stood at only 10.5–10.8 million metric tonnes — well below the prior year's 12.7 million metric tonnes — with some analysts projecting partial recovery toward 11.2–12.5 million metric tonnes but flagging downside revision risk. Ongoing geopolitical uncertainty in the Black Sea region continues to sustain freight premium risk on Ukrainian export corridors, which remain the primary origin for sunflower oil supplied to MENA markets.

For Middle Eastern and Gulf buyers, sunflower oil's light flavour, high smoke point, and fatty acid profile make it the preferred cooking medium across the food service and retail sectors. Any sustained tightening of Black Sea export flows will be felt disproportionately in this region.

West Africa and the Middle East: Structural Demand Growth Continues

Across West Africa, palm oil remains the dominant cooking oil by volume, chosen across all income levels for its affordability and versatility. Africa as a whole is projected to be the fastest-growing region in the global palm oil market, contributing a 12.7% share in 2026, driven by urbanisation and rising domestic consumption. Nigeria stands out as a major import hub, drawing supply primarily from Indonesia and Malaysia to bridge a widening gap between regional production and demand.

For distributors and importers in the UAE and wider Gulf, demand for both oils is being sustained by a large and diverse food manufacturing and food service base, with the UAE also functioning as a re-export hub toward African markets.

Takeaway for Buyers and Distributors

The balance of risks through H2 2026 leans bullish for both palm and sunflower oil. Buyers who can lock in forward positions or diversify sourcing across both commodities will be better placed to manage cost volatility. The Indonesia biodiesel mandate, India's festive-season demand cycle, and ongoing Black Sea freight risk are the three variables most likely to drive near-term price movements — and all three warrant close monitoring in the months ahead.