Palm oil prices are expected to rise significantly by the end of 2025, climbing to around $1,200 per metric ton from the current $900, according to new research by Afrinvest West Africa.
The firm attributes the anticipated 33% jump to escalating crude palm oil (CPO) prices in top-producing nations Indonesia and Malaysia, driven by robust fundamentals and energy market dynamics.
The report cites factors such as an expected upswing in crude oil prices, easing of U.S.-China trade tensions, and reduced global edible oil supply due to the biofuel policies of Southeast Asian nations.
Afrinvest stated: “Despite the 16.3 percent decline to $900.0 per MT in the first five months of 2025, we foresee CPO’s price to grow, hovering around $1,200 per MT by year-end.”
Last year, global CPO prices rose by 36.2% year-on-year to reach $1,086/MT — their highest level since mid-2022 — largely due to Indonesia’s B35 biodiesel mandate, El Niño-related supply constraints, and geopolitical disruptions to sunflower oil exports from Ukraine and Russia.
This price surge, however, presents both a challenge and an opportunity for Nigeria.
Alphonsus Inyang, President of the National Palm Produce Association of Nigeria, cautioned that the country’s dependence on imported palm oil could jeopardise its economic stability.
“This is an opportunity for Nigeria to increase local production; otherwise, what we see happening in the cocoa value chain may soon happen to the palm oil value chain,” Inyang warned.
Nigeria, the fifth-largest palm oil producer globally, currently produces 1.5 million metric tons annually but still relies on imports to meet a 450,000 MT supply gap.
CPO exports globally increased by 1.7% to 44.2 million MT in 2024, with Indonesia accounting for over 50% and Malaysia nearly 35% of the supply.
Although global demand remained strong, the sector faced setbacks such as shipment delays, restrictive export policies, and rising costs.
Afrinvest noted that productivity gains — through improved seeds, better fertiliser use, and mechanised harvesting — are helping large producers maintain supply, and suggested Nigeria could do the same.
“This shift presents a strategic opportunity for Nigeria to revive the ‘Red Gold’ by transforming its underperforming oil palm sector into a regional hub and closing a 450,000 MT annual supply gap,” the report emphasized.
