ASEAN palm oil: Key newsflow (June 27 – July 3) Quick Note

Research evidence excerpt

ASEAN palm oil: Key newsflow (June 27 – July 3) Quick Note

Nomura | ASEAN palm oil 3 July 2026

2027E and include additional carve-outs for products such as aircraft and motor vehicle

seats, as well as conveyor belts. Furthermore, the draft proposes a one-year delay

extending until the end of 2027. While the initiative aims to curb forest clearance in

agricultural exporting nations as part of the EU's Green Deal, its complexity has generated

pushback from trading partners and industry stakeholders, prompting these modifications

to balance environmental objectives with implementation practicality.

Our view: While the exemption of palm oil derivatives for pharmaceuticals is a positive, it

accounts for only a minor part of the total palm oil trade with the EU, and we don't see any

major impact from this. However, we continue to expect the EUDR to be delayed further

beyond 2027F.

US biofuel goals face capacity lag

According to a 2 July news article in Reuters (link), the US government’s initiative to

expand bio-diesel output faces a significant challenge as domestic production facilities are

failing to meet established benchmarks. As per the EPA, refiners must blend 5.4bn gallons

of biodiesel and renewable diesel, which implies a 60% y-y increase. While the new

mandate factors a 90% annual operating capacity, actual utilization rates have only

reached 77% for biodiesel plants and 78% for renewable diesel facilities in May 2026. A

prolonged supply deficit may trigger a significant surge in renewable fuel prices, which

may lead to the US government to exercise a rarely used provision which permits

downward adjustment of previously established mandates to align with prevailing market

conditions.

Our view: The US government had announced the final blending program in March 2026