Will commodity price turbulence continue through 2025?

In 2025, vegetable oil prices have surged due to climate pressures and tariff uncertainties. Industry news website FoodNavigator says unpredictable weather patterns are impacting key crops such as rapeseed, sunflower oil and palm oil, leading to significant volatility in the markets. The ongoing Russia-Ukraine war also continues to play a significant role in affecting the sunflower seed and oil market. High palm oil prices, driven by dry weather and aging oil palms in southeast Asia, peaked in February 2025. 

Rapeseed and sunflower oil prices are also rising due to poor growing conditions in the current season. In India, the world's largest vegetable oil importer, imports are expected to decline for the second consecutive year because of demand rationing, and other regions such as the EU and China are likely to experience low import levels as well. Looking ahead, analysts suggest that prices may begin to decline after May, influenced by macroeconomic factors and ongoing tariff uncertainty 

Despite market uncertainty with the on-off turbulence of tariffs, food company Mondelēz remains optimistic about navigating challenges. Tariffs may drive European food producers to seek new markets in developing economies such as China and India, which are expected to see significant growth. 

Tariff disruption continues in other sectors, as China halts all exports of rare earth minerals, affecting not only the US but also other countries such as Japan and Germany. The Financial Times reports that following Trump's so-called “Liberation Day” tariffs, China implemented its own export controls, requiring special licenses for rare earth shipments that have not yet been established. As a result, many ports are blocking exports, significantly impacting industries reliant on these materials, such as tech, automotive, aerospace and defence.

China's dominance in the rare earth market gives it a significant leverage in trade, despite rare earth minerals making up a small portion of its total exports. In light of these developments, the Trump administration is exploring options to boost domestic rare earth production, including potential deals with Greenland and Ukraine, and is drafting executive orders to facilitate stockpiling deep-sea metals.

The world’s maritime nations have reached a significant global deal to address shipping emissions after nearly a decade of negotiations. Starting in 2028, ship owners will be required to use cleaner fuels or face fines of up to $380 per tonne of carbon dioxide emitted. This agreement, passed at a recent UN International Maritime Organisation meeting, applies to most of the world's commercial shipping. The agreement almost fell apart when Saudi Arabia called for a last-minute vote and the US withdrew from discussions in London. The deal also faced criticism from environmental groups such as Clean Shipping Coalition and small island states for producing a watered-down version of what they’d hoped for.  

While the deal aims for an 8% reduction in emissions by 2030, it falls short of the IMO's previous target of 20%. Any penalties collected from non-compliance will fund a net zero initiative to support the development of greener fuels and aid developing countries. The agreement is expected to be formally adopted in October 2025.

A leaked document seen by the climate website DeSmog reveals that a PR campaign, on behalf of the Animal Agriculture Alliance, may have fuelled a backlash against the 2019 Eat-Lancet report, which advocated for a shift to a more plant-based diet to combat climate change. The report suggested cutting global red meat consumption by 50% and increasing plant-based food intake to mitigate the environmental impact of animal agriculture. Following its publication, researchers faced severe online harassment, personal threats, and a flood of negative media coverage, with over 500 articles criticising the report. 

The PR campaign spread messages that framed the Eat-Lancet recommendations as radical, leading to a culture war around dietary change. Despite the backlash, the Eat-Lancet report remains influential, cited in over 600 policy documents. With a second report expected in 2025, researchers hope to foster a more constructive dialogue around dietary shifts. 

The impacts of the Trump administration’s on-off-on tariffs have of course been significant. For Brazil a consequence could be more difficulty raising the finance it has targeted to mitigate effects of climate change. The country is set to host this year’s UN climate COP30 in the city of Belem and has plans to mobilise $1.3trillion in climate finance. At the COP29 meetings in late 2024 in Baku, Azerbaijan, £300bn was pledged by rich countries to mitigate climate change impacts. Brazil’s environment minister, Marina Silva, has said that tariffs are not good for anyone and cause countries to shift resources away from climate finance.