Senior global vegetable oil analyst Dorab Mistry noted that market dynamics during times of conflict are inherently difficult to predict.
“Market behavior during war is always very different, and many developments occur unexpectedly,” he said, as quoted by Reuters via , Thursday (March 19, 2026).

The surge in crude oil prices—reaching their highest levels in nearly four years—has strengthened the appeal of vegetable oils as biodiesel feedstock. The increase was triggered by Iran’s response to joint attacks by the United States and Israel, including threats to shipping routes in the Strait of Hormuz.

However, demand remains weak.
“Currently, consumption demand for vegetable oils is sluggish due to high prices. The market is placing strong hopes on biodiesel, but it remains to be seen which factor will dominate,” Mistry explained.

CPO Prices Rise, but Purchasing Power Weakens

Malaysian palm oil prices have surged around 14% this month, surpassing RM4,600 per ton. This has made palm oil more expensive than soyoil, except in Asia where lower logistics costs still provide some advantage.

Previously, Mistry had projected crude palm oil (CPO) prices to range between RM3,800 and RM4,300 until July 2026, supported by weak demand and ample supply.

India, the world’s largest vegetable oil importer, has reportedly held back on new purchases amid high prices. Industry players are waiting for price corrections before re-entering the market.

Indian importers are also under pressure after reducing inventories and canceling several previous import contracts. Some soyoil cargoes from South America and the Black Sea region have even been canceled, as soaring global prices have made domestic processing uneconomical.

Still, limited import arrivals are expected to support vegetable oil prices in India. However, price gains remain capped by abundant mustard oil supplies from the new harvest entering the market.

Going forward, market participants will closely monitor the balance between biodiesel-driven demand—boosted by high energy prices—and weak global consumption, which will ultimately determine the direction of vegetable oil prices, including palm oil.