Malaysia's Palm Kernel Oil Export Market Overview

Palm kernel oil sits within Malaysia's broader oil palm export complex, which generated RM112.43 billion in total export revenue in 2025, up 2.8% from RM109.39 billion in 2024. Within that complex, palm kernel oil is a smaller but fast-growing component — valued for its use in food manufacturing, oleochemicals, and cosmetics, where its distinct lauric acid profile makes it a different product from crude palm oil itself.

According to the Malaysian Palm Oil Board (MPOB), Malaysia exported 1,082,925 tonnes of palm kernel oil in 2025, down from 1,151,104 tonnes in 2024 — a 5.9% volume decline. Despite that drop, export revenue climbed sharply to RM9.21 billion, because palm kernel prices rose 29.4% year-on-year, reaching RM3,424.50 per tonne ex-mill, driven by supply tightness and stronger global lauric oil prices.

Revenue Up, Volume Down — The Price Story

The chart below makes the disconnect between volume and revenue unmistakable. Malaysia shipped less palm kernel oil in 2025 than in 2024, yet earned substantially more from it.

This pattern — falling volume, rising revenue — mirrors a broader trend across Malaysia's oil palm complex in 2025. Total palm oil exports also declined, falling to 15.27 million tonnes from 16.90 million tonnes the prior year (a 9.6% drop), while palm oil export revenue fell only 1.8% to RM71.63 billion, cushioned by firmer prices. Palm kernel oil, however, saw an even sharper price effect, with revenue rising even as the broader palm oil category's revenue slipped slightly.

Why Prices Spiked While Shipments Fell

Several factors converged to tighten palm kernel supply in 2025. Flooding in Peninsular Malaysia and Borneo during the 2024/25 marketing year damaged crops and disrupted harvesting, pushing crude palm oil prices up 9.7% to RM4,179.50 per tonne for the year and dragging palm kernel prices higher in tandem, since the two products come from the same fruit bunches. In addition, Indonesia's planned expansion of its B40 biofuel mandate — requiring a higher percentage of palm-based biodiesel in fuel blends — added further demand pressure across the entire palm complex, tightening supply available for export even before Malaysian output began to recover.

Malaysia's Position in Global Palm Kernel Oil Trade

Malaysia is the world's leading exporter of crude palm kernel oil (CPKO) by both volume and value — shipping roughly 307,827 tonnes worth approximately $376.7 million in 2024, according to global trade data tracked under HS subheading 151321. Interestingly, Malaysia is simultaneously a significant importer of the same product, bringing in around 115,974 tonnes (worth roughly $133.8 million) that year — making it the world's fourth-largest CPKO importer even while leading as an exporter. This dual role reflects Malaysia's position as an integrated refining and oleochemical hub: the country imports raw material to supplement domestic feedstock for its substantial downstream processing capacity, then exports a mix of crude and refined product.

On the raw palm kernel side (the unprocessed nut, before oil extraction), Malaysia's exports are comparatively minimal, since the country's extensive domestic milling infrastructure means producers typically keep kernels in-country for crushing rather than exporting them raw. Where raw palm kernel is exported, Thailand, the Philippines, and India together account for roughly 90% of destinations.

Challenges Facing Malaysia's Palm Kernel Oil Trade

The sector's near-term outlook hinges heavily on weather and competing biofuel demand, both of which lie largely outside Malaysia's direct control. Flooding has repeatedly disrupted harvests in recent years, and Indonesia's biofuel policy decisions ripple across the entire regional palm complex given how closely palm kernel and crude palm oil prices move together. In addition, Malaysia's palm kernel cake (PKC) by-product — a significant export in its own right, exceeding 2.4 million tonnes in 2024 to buyers including South Korea, New Zealand, and the EU — adds another variable, since crushing economics for kernel oil and cake are interlinked. Nonetheless, with palm oil ending stocks up sharply and Malaysia's refining and oleochemical capacity well established, the sector retains meaningful flexibility to respond as supply conditions normalise.

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