The Vegetable Oil Complex: Why Palm, Soy, Sunflower and Rapeseed Oil Move Together

Published September 25, 2026 · 3 min read

Palm oil, soybean oil, sunflower oil and rapeseed oil make up the large majority of the vegetable oil the world produces. For many uses - frying, food manufacturing, biodiesel - one can largely replace another. That is why traders speak of a vegetable oil "complex": when one oil gets scarce, buyers switch, and the others follow.

Four oils, four very different origins

Palm oil comes from a tree crop grown mainly in Indonesia and Malaysia, which together supply most of the world's palm oil exports. The trees produce all year round and yield far more oil per hectare than any annual oilseed, which usually makes palm the cheapest of the four - but new plantings take years to bear fruit, so supply adjusts slowly. Soybean oil is a co-product of crushing soybeans, mostly for animal feed: the meal is usually worth more than the oil, so how much soybean oil is produced depends largely on feed demand (see crush margin). Rapeseed and canola oil come from the EU, Canada and Australia, and sunflower oil comes predominantly from the Black Sea region, where Ukraine and Russia together account for well over half of world exports.

2022: one shock, four prices

The spring of 2022 showed the complex at work. The war in Ukraine blocked Black Sea sunflower oil exports, and in late April Indonesia briefly banned palm oil exports to contain its domestic cooking oil prices. According to World Bank data, sunflower oil rose from an average of about 741 dollars per tonne in 2019 to 2,361 dollars in March 2022, and palm oil from about 601 to 1,777 dollars in the same month; rapeseed and soybean oil peaked in April and May 2022. Buyers who could not get one oil bid up the others, and all four fell back together once supply normalized.

The fuel link

A growing share of vegetable oil ends up in fuel tanks. Indonesia blends palm oil-based biodiesel into its diesel, the United States turns soybean oil into renewable diesel, and the EU uses large amounts of rapeseed oil for biodiesel. These blending mandates create demand that barely reacts to price and tie vegetable oils to crude oil and energy policy - when diesel gets expensive or a mandate is raised, vegetable oil demand rises with it.

Why the gaps between them matter

The four oils move together, but not in lockstep, and the spreads between them tell their own story. In 2019 soybean oil cost on average about 165 dollars per tonne more than palm oil; in August 2026 the gap was around 520 dollars. Regional factors - a biofuel policy that pulls one oil into fuel, a harvest problem in one origin, an export tax - can push one oil away from the others for months. Large importers such as India, the world's biggest buyer of vegetable oils, respond by shifting between palm and the softer oils, which in turn pulls the prices back toward each other.