The US is importing palm oil again, to replace the soybean oil it burns
US palm oil imports stepped up in May, once the tariff on Indonesian palm came off and soybean oil in Chicago climbed far above palm. Even so, they cover only about a fifth of the soybean oil biofuel plants have pulled from other uses.
The United States is buying palm oil again. Imports ran at about 0.10 Mt a month from November to April, well under the 0.12 to 0.17 of the five previous winters, then stepped up in May and reached 0.18 Mt in September. Two things opened the door: a tariff that came off, and the soybean oil the US now burns.
The tariff held it back, soybean oil pulled it in
The winter slump was not about price. Soybean oil in Chicago traded above palm FOB Malaysia all winter, and the US still bought less palm than in 2024/25, when palm was the dearer oil. What changed is that the tariff on Indonesian palm, the main US supplier, was lifted in a February trade deal.
Biofuel did the rest. US plants used 0.39 to 0.44 Mt of soybean oil a month in December and January, then 0.65 to 0.77 from May to July, and the premium of soybean oil over palm went from 73 to 155 $/t in the autumn and early winter to 523 in May. Palm cannot follow soybean oil into the tank, since it earns no credit under the US biofuel mandate, so it goes where the soybean oil left: food and industry.
The last time the gap was this wide, at 440 to 600 $/t from June to September 2023, the US imported 0.15 to 0.23 Mt of palm a month through the following winter. It is running at 0.16 to 0.18 now.
A fifth of the gap, and no other way in
Even at that pace, palm covers little of what the tank takes. From May to August, biofuel plants used about 0.21 Mt a month more soybean oil than a year earlier, and palm imports rose by about 0.04.
Canola oil, the one other imported oil that does qualify for biofuel, has not moved. US imports stayed in their usual range, and US plants burned 0.13 to 0.15 Mt a month of it over the summer, less than the 0.18 to 0.24 of summer 2024. Canada is keeping its bigger crush at home: the USDA puts Canadian domestic use at 1.98 Mt in 2025/26, against 1.33 a year earlier, with exports flat.
Our reading: the premium now sets the pace
With the tariff gone, the soybean oil premium decides how much palm the US takes. The USDA expects 1.70 Mt of imports in 2026/27, against 1.48 last season. That is about 0.14 Mt a month, under what the US has bought since May, and as long as the premium holds near 400 $/t our reading is that the line is cautious. But the premium rides on diesel, and Brent lost 17.5% in the five sessions to 4 November. Three signals will tell:
- October and November imports. A pace held at 0.16 Mt or more would mean palm has settled in as a US food oil. A drop back toward 0.10 would mean the summer was the tariff catching up.
- The soybean oil premium over palm, 357 $/t on 3 November. A slide back toward last winter's levels would remove the reason to import.
- EIA's soybean oil use for biofuel. A return toward last winter's 0.4 Mt a month would hand soybean oil back to the kitchen.
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