OECD‑FAO Agricultural Outlook 2026‑2035

3. Oilseeds and oilseed products

Abstract

This chapter describes market developments and medium-term projections for world oilseed markets for the period 2026‑2035. Projections cover consumption, production, trade and prices for soybean, other oilseeds, protein meal and vegetable oil. The chapter concludes with a discussion of the key risks and uncertainties which could have implications for world oilseed markets over the next decade.

3.1. Projection highlights

Most oilseeds and oil crops (such as palm oil) are processed through crushing or pressing to produce protein meal and vegetable oil. Most production is used as protein meal in animal feed and a small share is fed in an unprocessed from. Around one‑quarter of total output, by weight and mostly vegetable oil, is used for direct human food consumption. The primary industrial use of vegetable oil is as feedstock for biomass-based biodiesel production.

The use of protein meals as animal feed will align with the slower demand from key importers; People’s Republic of China (hereafter “China”) is expected to reduce its feed consumption considerably, driven by improved feed efficiency combined with efforts to achieve lower protein meal shares in livestock feed rations.

Global food demand growth for vegetable oil is expected to remain strong, mainly driven by rising disposable income and population growth in middle-income countries and population growth in low-income countries.

The industrial use of vegetable oil for biomass-based biodiesel, currently about 18% of global vegetable oil use, is projected to grow globally, especially in Indonesia, Brazil and the United States. In the European Union, demand for biodiesel is expected to increase in the short term but contract between 2028 and 2035.

Palm oil and rapeseed yields are projected to improve slightly, reversing a decline seen over the last decade in major producing regions. Soybean yields are expected to continue to increase over the medium term. Similarly, cultivated areas are also expected to increase, resulting in increasing oilseed and vegetable oil output.

The traded share of oilseeds and oilseed products is among the highest of all agricultural commodities due to the high geographical concentration of supply and globally dispersed demand. Over the Outlook period, more than 37% of global soybean production is projected to be traded, while vegetable oil exports are expected to account for about 32% of world production. This largely reflects the geographic concentration of production: soybeans are mainly produced in the Americas and palm oil in Southeast Asia.

Prices of vegetable oil and protein meal are expected to show different future developments, with vegetable oil prices projected to remain relatively stronger due to sustained demand growth. Protein meal prices are expected to be relatively flatter due to changing demand patterns.

Specific uncertainties for oilseeds and oilseed products are changing demand patterns and the likelihood for success in efforts to reverse the decline in productivity. In terms of feed demand for protein meal, China might reduce the protein meal share in its animal feed beyond currently anticipated levels. The expected recovery in palm oil yields across major producing countries hinges on substantial replanting investments, which in turn depend on sustained government support. Any reductions or delays in budget allocations could slow these investments, potentially shifting demand toward alternative vegetable oils. Furthermore, any change in the biomass-based diesel industry directly affects vegetable oil demand projections.

3.2. Current market trends

Nominal prices of oilseeds and oilmeals have fluctuated within narrow ranges, while global vegetable oil prices remained firm

In 2025/26, international prices for soybeans have remained subdued, mainly underpinned by ample global supplies. Rapeseed prices have also fluctuated within a narrow range due to favourable production outcomes in 2025. Meanwhile, world oilmeals quotations largely followed suit, pressured by sufficient global soymeal supplies. By contrast, international vegetable oil prices remained firm and appreciated recently, underpinned by protracted tight fundamentals. Rising crude oil prices also lent support to vegetable oil values at times.

Global soybean production in 2025/26 is expected to remain close to the record high of 430 million tonnes (Mt), mainly due to the continuing increase in Brazil, where generally favourable growing conditions coincided with continued area expansion. Following a higher than expected recovery in 2025, expansion in world palm oil production is anticipated to slow down in 2026, driven by expectations of rather modest yield growth in Indonesia and Malaysia.

3.3. Market projections

3.3.1. Oilseed crush and production of vegetable oils and protein meal

Slowing global oilseed crush and limited growth in palm oil production

Globally, the crushing of soybeans and other oilseeds into meal (cake) and oil dominates their total usage at around 90%. The demand for crush will increase slightly faster than that for other uses such as the direct food consumption of soybeans (including for meat and dairy replacements), groundnuts and sunflower.

The key determinants of the location of the crushing of oilseeds are transport costs, trade policies (e.g. different tariffs for oilseeds and products), acceptance of genetically modified crops, processing costs (e.g. labour and energy) and infrastructure (e.g. crushing facilities, ports and roads).

Soybean crush is projected to expand by 57 Mt over the Outlook period, considerably less than the 97 Mt in the previous decade. Most of the growth in soybean crush is expected to occur in Latin America in contrast to previous decade, when it mainly occurred in China. The global crush of other oilseeds is expected to grow in line with production over the Outlook period and to occur more often in the producing country and region: in China for rapeseed and groundnuts and in Russian Federation (hereafter “Russia”) for sunflower seed, and Canada for rapeseed.

World production of protein meals from oilseed crush is dominated by soybean meal, which accounts for more than two-thirds of global production. Production is concentrated in a small group of countries led by China, the United States, and Brazil (Figure 3.1). In China and the European Union, most protein meal production comes from the crushing of imported oilseeds, primarily soybeans from Brazil and the United States. In the other major producing countries ‒ Argentina, Brazil, India and the United States ‒ domestically produced soybeans and other oilseeds dominate the crushing to produce protein meal.

Global vegetable oil production includes the crush of oilseeds as well as the production from perennial oil plants, especially oil palm. Coconut oil and cottonseed oil complete the vegetable oil aggregate. Palm oil and palm kernels are joint products; palm kernels are crushed into palm kernel oil and meal. Coconut oil is mainly produced in the Philippines, Indonesia and Oceanic islands. Palm kernel oil and coconut oil have important industrial uses, such as ingredients in soaps, detergents and cosmetics. The production of cottonseed oil, a product derived from cottonseed, is concentrated in China, India, and Brazil (see Chapter 10).

Over the past decade, lobal palm oil output has outpaced the production of other vegetable oils. However, growth in palm oil production over the Outlook is expected to weaken due to increasing sustainability concerns and the aging of oil palm trees in Indonesia and Malaysia, which impact yield developments. These countries account for almost one‑third of the world’s vegetable oil production and for more than 80% of global palm oil production.

At the global level, palm oil supplies are projected to expand at an annual rate of 1.4%. Increasingly stringent environmental policies from the major importers (e.g. the European Union Regulation on Deforestation-free Products) of palm oil and sustainable agriculture norms are expected to slow the expansion of the oil palm area in Indonesia and Malaysia. This implies that production growth needs to come from productivity improvements, including an acceleration of replanting. Palm oil production in other countries is expected to expand more rapidly from a low base, mainly for domestic and regional markets. For example, Thailand is projected to produce 4 Mt by 2035, Colombia 2.2 Mt and Nigeria 1.9 Mt. Latin America and the Caribbean is the fastest growing and second-largest palm oil-producing region in the world, contributing around 7.5% of global output. In several Central American countries, niche palm oil production is developing with global sustainability certifications in place from the outset, positioning the region to eventually reach broader export markets.

3.3.2. Vegetable oil consumption

Per capita demand for vegetable oil for food is slowing as biodiesel use expands

The two dominant uses of vegetable oil are for food and food preparation (52%) and as biodiesel feedstock (18%). A considerable share of food use is for frying rather than direct consumption, which results in used cooking oil which can be used as feedstock for biodiesel production. Vegetable oils are also used for cosmetics, varnishes and increasingly in animal feed, especially for aquaculture.

Per capita consumption of vegetable oil for food is projected to increase marginally (0.1%). While food demand is increasing in lower middle-income and low-income countries, it is slowing in high-income countries. In emerging markets such as China (25 kg/capita) and Brazil (21 kg/capita), the consumption of vegetable oil for food is set to reach levels comparable to those of high-income countries (Figure 3.2).

India, the world’s second-largest consumer and leading importer of vegetable oil, is projected to sustain a per capita food consumption growth of 1.7% p.a., reaching 12 kg/capita by 2035. This increase will be the result of imports of vegetable oil and increases in the crushing of increased domestic oilseed production.

As urbanisation and disposable income increase in low-income countries, dietary habits and traditional meal patterns are expected to shift towards greater consumption of processed foods that have a high content of vegetable oil. For least developed countries, per capita demand for vegetable oil is projected to expand to 7 kg/capita by 2035.

The global uptake of vegetable oil as feedstock for biodiesel is projected to increase faster at 2.1% p.a. over the next ten years, compared to the 7.0% p.a. increase over the previous decade when biofuel support policies took effect. The use of vegetable oil as feedstock for biodiesel depends on the policy setting (see Chapter 8) and the relative price development of vegetable oil and crude oil. In general, national targets for mandatory biodiesel consumption are expected to increase less than in previous years.

Indonesia and the United States will account for over 80% of the growth in the use of vegetable oil to produce biodiesel, with production reaching 22 Mt and 14 Mt, respectively, by 2035 due to supportive domestic policies. In the United States, renewable diesel is considered an advanced biofuel and is expected to contribute to the growth of the country’s biodiesel production.

On the other hand, the use of vegetable oil as feedstock for biodiesel in the European Union is expected to retract by 1.9% p.a. driven by the gain of used oils, tallow, and other non-feed and non-food feedstocks in the production of biodiesel in the share of biodiesel production. Globally, the use of waste oils and tallow as feedstock for biomass-based diesel has boomed in the recent past, and is expected to continue to grow, but its share – which peaked at 25% in 2024 – is projected to decrease over the next ten years.

3.3.3.  Protein meal consumption

Feed demand is slowing, shaped by developments in China

The protein meal content of soybeans is about 80% while for other oilseeds this share is 50‑60%. Protein meal is almost exclusively used as feed and its consumption is projected to continue to grow at 1.0% p.a., considerably below the growth over the last decade (2.3% p.a.).

The link between feed use of protein meal and animal production is related to the intensification of animal production, which increases demand for protein meal. Greater feed efficiency leads to a reduction in protein feed per animal. Demand is also affected by the composition of animal husbandry and herd sizes. The link between animal production and protein meal consumption is associated with a country’s level of economic development (Figure 3.3). Lower income countries, which rely on backyard production, consume less protein meal, whereas higher income economies, most of which employ intensive production systems, use higher amounts of protein meal. Because of a shift to more feed-intensive production systems in low-income countries in response to rapid urbanisation and increasing demand for animal products, growth in protein meal consumption tends to exceed growth in animal production.

China accounts for around a quarter of global protein meal demand and, in turn, is shaping global demand. Growth in China’s demand for compound feed is expected to be considerably slower than in the previous decade due to declining growth rates in animal production, especially pig meat, and the existing large share of compound feed-based production. The protein meal content in China’s compound feed is expected to remain stable after its surge in the last decade, but continues to exceed current levels in the United States and the European Union.

In the United States and the European Union, where most animal production is compound feed-based, the consumption of protein meal is expected to move (grow or decline) at a rate similar to that of animal production. In the European Union, animal products, primarily poultry and dairy, are increasingly marketed by large retail chains as produced without feed from genetically modified crops, which also curbs demand for soybean meal. In the United States and the European Union where most animal production is compound feed-based, the consumption of protein meal is expected to move at a rate similar to that of animal production. This results in a growth in the United States and a decline in the European Union.

3.3.4.  Oilseed production

Challenges remain for palm oil and rapeseed yield growth

The production of soybeans is projected to grow by 0.9% p.a., compared to 2.3% p.a. over the last decade. Growth will be dominated by yield increases, accounting for about 70% of production growth. Soybeans have the advantage of growing fast, which allows for double cropping, especially in Latin America. Consequently, a considerable share of additional harvested area increase will result from double-cropping soybeans with wheat in Argentina and maize in Brazil.

Brazil is the largest producer of soybeans and production is expected to grow at 0.7% p.a. over the next decade – slightly stronger than the 0.5% p.a. in the United States, the second-largest producer, due to double cropping with maize. The production of soybeans is projected to grow strongly elsewhere in Latin America, with Argentina and Paraguay producing 56 Mt and 13 Mt, respectively, by 2035. Soybean production is expected to continue to increase in China in response to reduced policy support for the cultivation of cereals, but at a slower pace than in the previous decade (3.9% p.a. vs. 4.6% p.a., respectively). Soybean production is also expected to increase in Canada, India, Russia and Ukraine.

The production of other oilseeds (rapeseed, sunflower seed and groundnuts) will grow at the same pace of 1.0% p.a. compared to 2.3% p.a. over the previous ten years. China (a major producer of rapeseed and groundnuts) and the European Union (which mainly produces rapeseed and sunflower seeds) are the most important producers of other oilseeds, with a projected annual output of 43 Mt and 28 Mt, respectively, by 2035. Russia and Ukraine, major producers of rapeseed and leading producers of sunflower seed, are expected to increase their annual production of other oilseeds to 26 Mt and 19 Mt, respectively, by 2035. Canada, the largest exporter of rapeseed, is projected to increase its production of other oilseeds by 0.8% p.a., to reach 22 Mt by 2035.

In the past two decades, the harvested area of soybeans, other oilseeds and oil palms has increased faster than that of cereals (Figure 3.4). This growth has created pressure on other land uses and environmental resources. In the case of soybeans in Latin America, a considerable part of the expansion of harvested area is due to increasing double cropping of soybeans with maize or wheat. In the coming decade, the growth of harvested area of soybean, other oilseeds and oil palms is only expected to increase to a limited extent.

Soybean stocks are projected to remain unchanged over the next decade, with a stock-to-use ratio reaching around 15% by 2035, which is marginally higher than in the past decade. This implies a slightly greater buffer and more moderate price volatility in the event of harvest failures.

3.3.5.  Trade

Trade is significant for oilseeds and products, but slowing down

During the base period, over 40% of world soybean production was traded internationally, a high share compared to other agricultural commodities. The expansion in global soybean trade is closely tied to the growth trend of soybean crush. In China, the volume of soybean crush and imports are projected to decrease considerably compared to the last decade. China accounts for about 56% of global imports, representing 98 Mt by 2035, down from 3% p.a. in the period 2016‑2025.

Exports of soybeans originate predominately from Brazil and the United States. Brazil is the largest global exporter of soybeans, with steady growth in its export capacity, and is projected to account for 61% of total global exports of soybean by 2035 (Figure 3.5).

For other oilseeds, the internationally traded share of global production remains much lower at about 12% of world production, as the two largest producers – China and the European Union – are net importers. The main exporters are Canada, Australia and Ukraine, which are projected to account for 69% of world exports by 2035.

Vegetable oil exports, which amount to 33% of global vegetable oil production, continue to be dominated by a few players, namely Indonesia and Malaysia, which account for roughly half of total vegetable oil exports. However, the share of exports in production in Indonesia is projected to decline as domestic demand for food, oleochemicals and especially biodiesel uses is expected to grow. India is projected to continue its strong growth in imports at 1.4% p.a., reaching 21 Mt by 2035, to meet increasing demand driven by population growth, urbanisation and rising disposable incomes. At the same time, the Indian government is placing increasing emphasis on strengthening domestic agricultural capacity; these efforts focus on improving farming practices, enhancing support services for producers, and fostering conditions that enable more robust and resilient local production.

The projected growth in world trade of protein meal is 1.3% p.a. over the Outlook period. Argentina, with its clear export orientation, is expected to remain the largest meal exporter, followed by Brazil and the United States. The largest importer is the European Union, with imports expected to continue declining due to reduced domestic demand for protein meal. The majority (80%) of the global import growth in protein meal is projected to occur in Asia, and particularly Southeast Asia, driven by expanding animal production. As t the domestic crushing capacity in Asia is not expected to keep pace with rising demand, expansion of the livestock sector is expected to rely on imported feed.

3.3.6.  Prices

Real prices will remain under pressure over the next decade

Oilseed and product prices are expected to increase slightly in nominal terms while declining in real terms following the long-term trend of agricultural commodity prices (Figure 3.6). The expected demand for vegetable oils slightly surpasses the demand for protein meal; the price gap between the products is expected to reflect this and remain stable. The expected increases in demand for vegetable oil will also favour other oilseed prices over soybeans as they contain higher shares of vegetable oil.

3.4. Risks and uncertainties

Environmental concerns influence global oilseed supply chains

The traded share of soybeans and vegetable oils production is considerably higher than other agricultural commodities (approximately 37% and 33%, respectively in 2035); therefore, these products are likely to be more affected by any changes in trade regimes. On the one hand, this could result in a shift of trade flows either due to more beneficial trade conditions in bilateral agreements or due to trade frictions and restrictions. On the other hand, the integration of environmental sustainability considerations into trade regulations could influence global oilseed and oilseed product trade. Palm oil and soybeans are often mentioned when the link between agriculture and deforestation is discussed. Both products are included in the European Union’s Deforestation Regulation of 2023 (Regulation (EU) 2023/1115) as relevant products alongside cattle, cocoa, coffee, rubber and wood. The impact on global soybean and palm oil trade remains uncertain but could impact global oilseed and oilseed product markets. In producing countries, several measures to address these deforestation concerns, including certification of deforestation free production, have been implemented and increase in relevance for trade.

Yields for major producers of palm oil and for some major suppliers of rapeseed have fallen or grown slowly during the last decade (Figure 3.7). There are many reasons for this development: a significant increase in production area so that less favourable land is used for production, reducing average yields; the ageing of oil palms as well as labour shortages has reduced yields; restrictions in the use of pesticides adversely affected average rapeseed yields in the European Union; and shifting weather patterns. It remains uncertain how this will play out over the coming decade.

The recovery in palm oil yields in Indonesia remains closely tied to substantial replanting efforts, which depend on government support. Any reduction or delay in public funding risks slowing these investments and could shift the demand towards alternative vegetable oils. At the same time, elevated vegetable oil prices might temper per capita consumption growth, contributing to a more subdued expansion in use.

Sustainability concerns will also influence the expansion of palm oil output as demand in developed countries favours deforestation-free oils and seeks sustainability certification for vegetable oil used as a biodiesel feedstock and, increasingly, for vegetable oils entering the food chain. However, there are concerns about competing certification schemes in Indonesia and Malaysia.

Biofuel policies in the United States, the European Union and Indonesia, the three largest users of biodiesel, remain a major source of uncertainty in the vegetable oil sector. In Indonesia, attaining the proposed 50% biodiesel mandate is doubtful given the need for government subsidies and possible medium-term supply constraints. In the United States, renewable diesel receives considerable support in some states (e.g. California) that show strong production growth rates. In the European Union, policy reforms, a reduction of overall diesel use and the emergence of second-generation biofuel technologies will likely prompt a shift away from crop-based feedstocks, especially vegetable oils. Globally, investments in and the uptake of sustainable aviation fuels and electric vehicles will be a decisive driver determining biofuel patterns in the next decade (Chapter 8). are expected to be a substantial use of biofuels but the timing of introduction remains largely uncertain.

China's demand for soybeans and protein meal depends largely on the evolution of its animal production sector. Over the next decade uncertainties persist, due to risks facing the meat market, such as outbreaks of animal diseases. In addition, evolving consumer preferences could shift animal protein intake towards other sources, reducing the demand for certain types of feed, including protein meals. Moreover, protein meals face competition from other feed components in the production of compound feed. Thus, changes in cereal prices will prompt adjustments in the balance between compound feed ingredients and might affect protein meal demand.