India Becomes Palm Oil's Deciding Market: Malaysian Exports Jump 40% as Indonesia Focuses on B50

Kuala Lumpur — Amid weaker prices and building stocks, the contest for the global palm oil market increasingly hinges on one country: India. Malaysia's palm oil exports to India jumped 40.4% in January–August 2026 and it is now expanding its marketing presence there, while Indonesia is absorbing more and more of its own palm oil for B50 biodiesel.

Malaysia pushes hard into India

According to the Malaysian Palm Oil Council (MPOC), Malaysia's palm oil exports to India rose 40.4% in January–August 2026 to 2.26 million tonnes, lifting Malaysia's share of India's palm oil imports to 39.2%. India has been Malaysia's largest palm oil export market for 13 consecutive years; in 2025, exports of palm oil and palm-based products to India reached around 2.94 million tonnes, worth RM14.15 billion.

Malaysia's Minister of Plantation and Commodities, Noraini Ahmad, led a trade mission to India from 27 September to 1 October 2026, visiting Bengaluru and Mumbai and delivering a keynote address at Globoil India 2026. "India remains a key market in Malaysia's long-term strategy to expand its palm oil trade," said MPOC CEO Belvinder Kaur Sron. The mission also targeted opportunities in oleochemicals, speciality fats and value-added palm oil applications.

The push was reinforced at the Malaysian Palm Oil Forum in Kuala Lumpur on Wednesday (7 October 2026). MPOC chairman Carl Bek-Nielsen, according to the New Straits Times, outlined MPOC's expanding presence in India and Africa, including offices in Chennai and Lagos and a sub-Saharan Africa regional office in Nairobi. "Even when prices are not in our favour, relationships built patiently on the ground still carry real weight," he said, as quoted by the New Straits Times.

India: the biggest buyer, but not entirely loyal

• Dominant. Palm oil accounts for around 51% of India's vegetable oil imports and around 34% of its total vegetable oil consumption.
• Competition. According to the Solvent Extractors' Association of India (cited by Reuters, 30 September 2026), India's sunflower oil imports are expected to rise by around 30% in the 2026/27 marketing year to 3.5 million tonnes, driven by the removal of import duty on crude sunflower oil, while palm oil imports are expected to hold at around 8 million tonnes.
• Seasonal demand. India's festival season in the fourth quarter usually supports cooking oil demand—one of the factors analysts are counting on to hold prices up.

Indonesia's position

For Indonesia, these dynamics cut both ways. On one hand, the B50 programme reduces the volume of palm oil available for export—the Indonesian Palm Oil Association (GAPKI) estimates export room could shrink by 3–4 million tonnes in 2027, as discussed in its proposal for a flexible biofuel policy. That gap is now being filled by Malaysia, particularly in India. On the other hand, reduced Indonesian export supply props up global CPO prices, which in turn supports farmers' fresh fruit bunch (FFB) prices and export levy revenue.

The question is how long Indonesia can maintain its bargaining position in the world's largest export market while continuing to raise its biodiesel blend—especially if B60 is implemented in 2027. The MPOB data on 12 October and Indonesia's actual export figures will provide the next clues. Read also: Malaysia relies on B15 for energy security.