Market evolution: Refined palm oil (CN 151190) — 2015–2025

Introduction

This report examines the European Union's trade in refined palm oil and its fractions (CN 151190) over the 2015–2025 period. The product classification covers palm oil and its fractions, whether or not refined, excluding chemically modified and crude palm oil, spanning industrial and food-grade liquid fractions as well as solid fractions in various packaging sizes.

Over the decade, the EU's refined palm oil market has been shaped by three interconnected dynamics: a dramatic rise in unit prices that inflated trade values despite shrinking volumes; a structural reorientation of trade partners, particularly the collapse of Russian export markets; and a growing gap between domestic demand and local processing capacity. The EU's net import reliance climbed from 35.7% to 48.7%, underscoring the bloc's increasing dependence on external suppliers for a commodity used across food, oleochemical, and bioenergy industries.

I. Price-led value growth masks a persistent volume contraction

The most striking feature of EU refined palm oil trade over 2015–2025 is the divergence between value and volume trajectories. Import expenditure rose 43.8% from €1.19 billion to €1.72 billion, yet import volumes fell 17.8% from 1.78 million tonnes to 1.46 million tonnes. The reconciliation lies in unit prices, which climbed 74.9% from €671 to €1,175 per tonne. Export dynamics were even more dramatic: values remained nearly flat (–3.9%), but volumes collapsed 53.6% as prices surged 107.1%.

Import values rose 43.8% despite a 17.8% decline in physical volumes

Source: General Overview – Trade

The volume decline reflects tightening EU sustainability policies — including the Renewable Energy Directive's phase-out of palm oil in biofuels — while the price increase tracks the global commodity boom of 2021–2022. The minimum unit import price of €618/t was recorded in 2016; the maximum of €1,280/t occurred in 2022, coinciding with Indonesia's temporary export ban and the post-Ukraine invasion commodity surge.

Export volumes halved while prices doubled, compressing the EU's trade position

Source: General Overview – Trade

The near-halving of export volumes signals that EU processors are channelling a larger share of refined output into the domestic market or that competitive pressures have eroded the bloc's external market share. Either way, the trade deficit widened from –€1.05 billion in 2015 to –€1.58 billion in 2025, a deterioration of 50.5%.

The 2022 price spike represents the period's defining market shock

Across all sub-categories, unit prices peaked in 2022 or 2023. For industrial liquid palm oil (CN 15119091), the import price jumped from €626/t in 2020 to €1,174/t in 2022 (+87.6% in two years). For food-grade liquid palm oil (CN 15119099), the price rose from €756/t to €1,439/t over the same interval (+90.3%). These spikes reflect the global supply disruption triggered by Indonesia's export restrictions in April–May 2022, compounded by elevated energy and freight costs.

The EU trade deficit reached its widest point in 2022 at –€2.73 billion

The deficit peaked in 2022, driven by the conjunction of high prices and still-elevated import volumes. While the deficit narrowed to –€1.58 billion by 2025 as volumes declined, the structural imbalance remains firmly in place. At no point during 2015–2025 did the EU achieve a trade surplus in refined palm oil.

II. Trade geography reoriented under the combined pressure of sustainability policy and geopolitical disruption

The EU's supplier and customer base for refined palm oil shifted materially over the decade. The import side witnessed a gradual diversification away from Indonesia toward Malaysia and smaller origins, while the export side was reshaped by the collapse of the Russian market and the growing importance of the United Kingdom.

Indonesia remained the dominant supplier while Malaysia nearly doubled its share

Source: General Overview – Top Partners

Indonesia's near-flat performance (+3.3% in value) belies the fact that volumes from this origin likely declined significantly given the broader price environment. Malaysia's value more than doubled, suggesting EU buyers pivoted partly from Indonesian to Malaysian supply — a shift consistent with differences in the two countries' respective sustainability certification regimes and export policies. The near-disappearance of Papua New Guinea as a source (–94.3%) further illustrates the volatility of smaller suppliers.

Russian exports collapsed by 86.8% amid sanctions, while the UK became the EU's primary export market

Source: General Overview – Top Partners

The collapse of EU refined palm oil exports to Russia — from €51.9 million in 2015 to €6.8 million in 2025 — is among the most dramatic structural breaks visible in the data. The decline accelerated from 2022 onward, consistent with the EU sanctions imposed following Russia's invasion of Ukraine. The United Kingdom, which surpassed Russia as the EU's top export destination by 2018, absorbed €84.0 million in 2025, reflecting the continued trade integration facilitated by the EU–UK Trade and Cooperation Agreement. Ukraine's emergence as a fast-growing market (+1,107.2%) — from a very low base — may partly reflect re-export or transit dynamics.

Import concentration declined, but export markets became more concentrated

Source: General Overview – Concentration HHI

The import-side HHI decline signals genuine diversification, though at 4,208 the market remains moderately concentrated by standard thresholds (a duopoly of Indonesia and Malaysia still accounts for the bulk of inflows). The export-side HHI increase is a direct consequence of the Russian market's collapse: with one major destination removed, remaining flows became more concentrated on the UK and a handful of Balkan and Western European markets.

Volatility remained elevated for smaller and newer trading partners

The coefficient of variation of import flows exceeded 1.0 for Papua New Guinea (1.12), Ghana (1.19), and Honduras (1.96), confirming the instability of supply from smaller tropical origins. On the export side, Russia (0.87), Ukraine (0.88), and Senegal (1.40) exhibited the highest volatility. By contrast, Indonesia (0.30) and the UK (0.26) showed comparatively stable trade relationships.

III. Industrial palm oil demand contracted sharply while food-grade fractions gained ground

Beneath the headline trade figures, the composition of EU refined palm oil flows shifted significantly between 2015 and 2025. Industrial liquid palm oil — the largest sub-category by volume — contracted by nearly two-thirds, while food-grade liquid fractions expanded by almost 60%. This rebalancing reflects both regulatory pressure on non-food uses and the enduring centrality of palm oil in EU food manufacturing.

Industrial liquid palm oil imports fell 62% from 916,889 tonnes to 349,076 tonnes

Source: Product Segment Breakdown – Imports

The collapse of industrial liquid palm oil (CN 15119091) is the single most consequential structural change in the dataset. This sub-category covers palm oil destined for oleochemical, surfactant, and — critically — biofuel applications. The EU's Renewable Energy Directive II, which imposed a cap on high-ILUC-risk biofuel feedstocks including palm oil, directly constrained this demand channel. The decline was not gradual: after peaking at 1.90 million tonnes in 2017, volumes fell by more than 80% over the following eight years.

Food-grade liquid palm oil imports rose 59% to 595,238 tonnes, driven by steady food-industry demand

The growth of food-grade liquid fractions (CN 15119099) from 373,766 tonnes to 595,238 tonnes underscores palm oil's continued importance in EU food processing — in confectionery, bakery fats, margarines, and instant noodles, among other applications. In value terms, this sub-category's import bill rose 163% from €272.7 million to €715.5 million, reflecting both volume growth and the global price surge. The rising share of food-grade imports in the total mix suggests that regulatory constraints have selectively penalized non-food uses while food consumption proved more price-inelastic.

Export volumes declined across all sub-categories, with industrial liquid palm oil exports collapsing by 48%

Source: Product Segment Breakdown – Exports

The near-halving of overall export volumes — and the 58% decline in food-grade liquid exports specifically — indicates that EU refiners are processing less palm oil for re-export. This is consistent with the observed decline in EU production volumes relative to peak years (the peak was 3.19 billion kg versus 1.59 billion kg in 2025, a 50% drop from peak), and with the loss of the Russian export market.

EU domestic production grew 28.4% in volume and 135% in value, led by the Netherlands and Italy

Source: Market Structure – Production Volumes

Among EU Member States, the Netherlands dominates with 54.8% of domestic production volume and a Revealed Comparative Advantage (RCA) of 3.78, reflecting Rotterdam's role as Europe's primary palm oil refining hub. Denmark shows the highest specialization (RCA 4.08, RSCA 0.606), while France — the EU's fourth-largest economy — exhibits minimal specialization (RCA 0.014, RSCA –0.97), consistent with its historically limited engagement in palm oil processing.

Conclusion

The EU's refined palm oil market over 2015–2025 underwent a transformation driven by three forces: price volatility, regulatory intervention, and geopolitical disruption. The headline story is paradoxical: the EU's import bill grew 43.8% even as volumes fell 17.8%, a gap explained entirely by the near-doubling of unit prices. The trade deficit widened to –€1.58 billion, underscoring the bloc's structural dependence on Southeast Asian supply.

The most significant structural shift was the 62% decline in industrial liquid palm oil imports, a direct consequence of EU biofuel policy under the Renewable Energy Directive. This decline was partially offset by a 59% increase in food-grade liquid imports, reflecting the food industry's continued — and apparently price-inelastic — demand for palm oil as a functional ingredient.

On the geopolitical front, the collapse of EU exports to Russia (–86.8%) and the consolidation of the UK as the primary export destination (+53.9%) redraw the map of EU refined palm oil commerce. Import concentration declined modestly as buyers diversified away from a pure Indonesia–Malaysia duopoly, though the two countries still supply the overwhelming majority of inflows.

Looking forward, the EU Deforestation Regulation (EUDR), effective from December 2024 for large operators, will impose supply-chain traceability requirements that could further reshape sourcing patterns. Whether this accelerates the volume decline, redirects flows toward certified suppliers, or raises costs for EU food manufacturers remains the key question for the next phase of this market's evolution.