Vegetable oils: a family of prices that move together, up to a point
Vegetable oils are close substitutes: a food manufacturer can often switch between palm, sunflower and rapeseed oil when relative prices move. That should tie their prices together, and it does, but only partly. Coconut oil and palm kernel oil correlate at 0.72, rapeseed and sunflower oil at 0.66, while sunflower and coconut oil show just 0.29, measured on month-to-month percentage changes over the 120 months to August 2026 (World Bank Pink Sheet). Geography explains a good part of the pattern.
Two supply clusters
Palm oil and palm kernel oil come from the same crop in the same places: Indonesia made 59% of palm oil and 59% of palm kernel oil, and Malaysia 23% and 25% (FAOSTAT). Sunflower oil is a different cluster on the Black Sea: Russia 31% and Ukraine 27%, together 58% of world output in 2023 (FAOSTAT). Rapeseed comes from Canada, China and India (22%, 19% and 15% of the seed crop), and coconut oil from the Philippines, Indonesia and India (39%, 21% and 18%).
Five prices since 2021
| Oil | 2021 | 2022 | 2023 | 2024 | 2025 | Aug 2026 |
|---|---|---|---|---|---|---|
| Palm oil | $1,130/t | $1,276/t | $886.5/t | $963.5/t | $1,007/t | $1,117/t |
| Sunflower oil | $1,404/t | $1,651/t | $1,007/t | $1,060/t | $1,264/t | $1,492/t |
| Rapeseed (canola) oil | $1,502/t | $1,757/t | $1,065/t | $1,089/t | $1,226/t | $1,474/t |
| Coconut oil | $1,637/t | $1,635/t | $1,075/t | $1,519/t | $2,480/t | $1,853/t |
| Palm kernel oil | $1,533/t | $1,617/t | $990.6/t | $1,412/t | $2,093/t | $2,264/t |
Annual averages of the World Bank benchmark for each oil (a different market and port for each, so levels are not directly comparable). The shared shape is plain: all five fell in 2023 from 2022. The peaks were not shared: palm, sunflower and rapeseed oils topped out in March 2022, March 2022 and April 2022, within two months of the invasion of Ukraine on 24 February 2022 that the 2022 energy shock describes, while coconut oil peaked at $2,841/t in July 2025 and palm kernel oil at $2,606/t in April 2026 (World Bank Pink Sheet). Two countries supplying 58% of sunflower oil is a concentration the supply concentration report puts in context.
Reading a family of prices
Substitution links prices only where buyers can switch and shipping is possible, so the tightest ties are within a supply cluster (the two palm oils) and between oils used in the same recipes (rapeseed and sunflower). Coconut and palm kernel oil are the two lauric oils, which oleochemical plants can switch between (see the coconut oil page), and that fits their high correlation with each other. Loose ties between other pairs are a reminder that “vegetable oil” is not one market. See sanctions and commodities for how a trade restriction can break the ties, and the linked prices report for every pair. Prices are monthly benchmark averages and are not investment advice. Figures are as of the August 2026 data.
Frequently asked questions
Who makes most of the world's palm oil?
Indonesia made 59% of the world's 79.6 million tonnes of palm oil in 2023 and Malaysia 23%; the top five together made 91% (FAOSTAT).
Who makes most of the world's sunflower oil?
Russia made 31% and Ukraine 27% of the world's 22.7 million tonnes of crude sunflower oil in 2023, together 58% (FAOSTAT).
Do all vegetable oil prices move together?
Only some pairs do. Over the 120 months to August 2026, monthly changes in coconut oil and palm kernel oil correlate at 0.72, rapeseed and sunflower oil at 0.66 and palm oil and palm kernel oil at 0.64, but sunflower and coconut oil only 0.29 (World Bank Pink Sheet).
When did vegetable oil prices peak?
Palm, sunflower and rapeseed oils all reached their highest monthly averages in March 2022, March 2022 and April 2022: $1,777/t, $2,361/t and $2,266/t. Coconut oil peaked later, at $2,841/t in July 2025 (World Bank Pink Sheet).
Why are palm oil and palm kernel oil different prices?
They come from different parts of the same fruit and trade as separate benchmarks: $1,117/t for palm oil and $2,264/t for palm kernel oil in August 2026. Their monthly price changes correlate at 0.64, closer than most pairs but far from identical (World Bank Pink Sheet).
Related
- why commodity prices spike
- the 2022 energy shock
- producing vs exporting vs processing
- sanctions and commodities
- benchmarks explained
- Where does palm oil come from?
- Where does sunflower oil come from?
- Where does coconut oil come from?
- Where does palm kernel oil come from?
- Where does canola come from?
- Glossary: benchmark
- Glossary: spot price
- Glossary: arbitrage
- Glossary: nominal price
- Glossary: producer price