Global vegetable-oil production set to hit another record high

A preliminary estimate by USDA of global vegetable-oil supply and demand in 2026-’27 marketing year indicates that global production is likely to reach 244.1 million metric tons, representing an increase of approximately 6.8 million tons compared with the current season.

Supply is expected to fully cover demand, which is forecast at 237.6 million tons.

Against this backdrop, Germany’s Union zur Förderung von Oel- und Proteinpflanzen (UFOP) said it sees an urgent need to reassess and adjust the EU cap on biofuels derived from cultivated biomass because sufficient feedstock availability serves as a buffer and strengthens security of supply.

According to research conducted by Agrarmarkt Informations-Gesellschaft, palm oil is set to remain the world’s most important vegetable oil in terms of production and consumption, with global output estimated at a record 81.4 million tons.

This would represent an increase of 90,000 tons compared with 2025-’26.

Indonesia is expected to remain the largest producer with an output of 47.5 million tons, followed by Malaysia at 19.6 million tons and Thailand at 3.7 million tons.

Production of soybean oil is expected to see the most pronounced rise in the coming crop year, with the increase projected at 2.9 million tons, bringing total output to 74.7 million tons.

China, by far the largest processor of soybeans, is anticipated to remain the leading producer of soybean oil with 21.4 million tons, followed by the U.S. with just over 14.8 million tons.

Production of rapeseed oil in 2026-’27 is expected to increase 2.7 million tons compared with the current season, reaching 37.2 million tons.

Sunflower-seed oil output is projected to grow by around 2.6 million tons to 23.5 million tons, primarily due to higher production in Ukraine, Russia and the EU-27.

UFOP underlined the growing demand for waste oils and fats for biodiesel and renewable diesel production associated with the implementation of RED III in EU member states and ambitious quota policies in North and South America.

In the case of waste oils, UFOP estimated that between 5 percent and 10 percent of global vegetable-oil production can be collected as waste oil.

The global volume of waste oil suitable for collection is therefore only around 12 million to 24 million tons.

According to UFOP, shipping and aviation have also become competitors for this feedstock, because under EU legislation biofuels counted towards targets in these sectors must be produced from waste or residual materials.

UFOP stressed that this feedstock-displacement effect is undermining the decarbonization of road transport.

Consequently, in view of the forthcoming revision of the Renewable Energy Directive (RED IV), UFOP raised the question of whether the caps on biofuels from cultivated biomass and their contribution to security of supply need to be reviewed.

The reason given is that adjusting the caps would create a supply buffer that would help meet statutory blending and climate-change mitigation targets.

UFOP also noted critically that, in its latest report, the Expert Council on Climate Issues concluded that the German government’s Climate Action Programme for the transport sector is inadequate and based on little more than hope.