The Southeast Asian Crude Palm Kernel Oil (CPKO) market witnessed a strong upward price movement between December 2025 and mid-February 2026, followed by moderate correction towards the end of February. The increase was primarily driven by supply tightness in key producing regions, robust demand from the oleochemical sector, and supportive global vegetable oil fundamentals.

Southeast Asia remains the dominant global production hub, led by Indonesia and Malaysia, supported by integrated refining and downstream oleochemical industries.

The 3.14 per cent increase in palm kernel oil prices between 27 February and 06 March 2026 was driven by multiple interconnected factors following the Israel–US–Iran conflict. Rising crude oil prices strengthened the vegetable oil complex, while higher palm oil feedstock costs, renewed downstream demand, seasonal consumption, and precautionary buying collectively supported the market rebound. As a result, prices recovered quickly after the late-February correction and moved higher in early March.

Crude palm oil prices are rising after the Israel–US–Iran war mainly due to the following interconnected factors:

  • Rising global crude oil prices caused by supply disruption risks.
  • Increased demand for palm oil in biodiesel production.
  • Higher freight and shipping costs in global trade.
  • Increased agricultural and production costs.
  • Continued strong demand from food and oleochemical industries.

Because palm oil is closely linked with energy markets and biofuel production, geopolitical conflicts that push up oil prices often lead to higher palm oil and palm kernel oil prices globally.

Major Producing Countries

  • Indonesia
  • Malaysia
  • Thailand

Downstream Market Mapping
This segment represents the largest share of CPKO consumption globally.

Regional Demand Outlook

Southeast Asia
Strong integration between plantation, refining, and oleochemical sectors supports export competitiveness.

China
A major importer of fatty alcohols and surfactants, driven by the consumer goods sector.

India
Growing demand for soaps, detergents, and personal care products.

European Union
Sustainability, traceability, and certification are key purchasing factors.

Market Outlook
The crude palm kernel oil market showed a strong upward trend between December 2025 and early March 2026, largely supported by rising palm oil feedstock costs and sustained demand from downstream oleochemical industries. Seasonal festival-driven consumption of edible oils in key importing countries further strengthened the vegetable oil complex, indirectly supporting palm kernel oil prices.

In addition, geopolitical tensions following the Israel–US–Iran conflict contributed to the bullish market sentiment. The escalation raised concerns about potential disruptions in global energy supply and shipping routes, which pushed crude oil prices higher and increased freight and logistics costs. Higher energy prices improved the economics of biofuel production, thereby strengthening demand for palm-based oils. As a result, the palm oil complex experienced upward price pressure, which also supported the crude palm kernel oil market during the period.