For the first time in many years, demand for vegetable oils will outpace production - analysts cite logistical and production disruptions in the Black Sea region, as well as growing consumption of soybean and rapeseed oils in the biofuel sector, as key reasons.
This is reported by Dengi.ua with reference to AgroWeek.
How Much Will Oil Production Lag Behind Global Demand in 2026/27?
The global vegetable oil market is entering the new marketing season in a state of structural deficit: projected consumption will exceed actual output, forcing the industry to urgently draw on accumulated reserves to bridge the gap.
According to estimates by the leading analytical service Oil World, global production of the eight major types of vegetable oils will grow by only 1.7% in the 2026/27 season - to 237.2 million metric tons. At the same time, projected consumption is expected to reach 237.6 million metric tons (compared to 232.23 million metric tons in the current season). Thus, for the first time in a long while, global demand will exceed total supply.
Why Problems in the Black Sea Region Will Exacerbate the Shortage as Early as This Winter
Significant tension on global commodity exchanges could arise as early as the first quarter of the new marketing year. Traders’ early estimates were based on expectations of a higher sunflower crop and steady exports of sunflower oil from the Black Sea basin countries.
However, systemic disruptions in the production and logistics chains of Ukraine and Russia mean that shipment volumes will remain significantly below historical baseline levels. As a result, global importers will have to urgently shift to alternative products, but the market for alternatives is currently extremely limited.
Why Soybean and Canola Oils Cannot Replace Sunflower Oil
The main alternatives - soybean and canola oils - are being actively redirected to meet the needs of the green energy sector. In North America and the European Union, strict mandates for mandatory biodiesel blending remain in place, which consume enormous volumes of raw materials. The situation is further exacerbated by the expected decline in palm oil production and exports in key Asian countries.
Analysts cite the soybean oil market as a prime example: global production this season is estimated at 71 million metric tons (+2.5 million metric tons compared to last year), but this increase has not translated into higher export shipments. In the U.S., domestic soybean oil consumption reached nearly 4.9 million metric tons in April–July alone (+0.8 million metric tons year-over-year), causing commercial inventories within the U.S. to drop by a quarter in just four months.
How Much Will Global Raw Material Stocks Decline?
Due to the growing deficit, the growth rate of global vegetable oil consumption in the new season will inevitably slow to 2.3% (compared with 3.6% a year earlier).
To balance the market, processors will have to draw on strategic reserves: according to Oil World’s forecasts, total global vegetable oil stocks will fall by 13.5% - to 31.97 million metric tons.
