Fatty Acid market sliding to downward trend according to recent assessment

Fatty Acid prices in the Asian market are tracing downward this month due to ample supplies outpaced by stable demand from the downstream Detergent sector. Despite rising feedstock costs and import disruptions globally, the declining interest of people in this sector is the main reason for this downhill pricing trend across the region.

Owing to the Russia-Ukraine war, along with other factors like insufficient output, increased export levies and labor shortages in major Palm Oil exporting countries, ( Indonesia and Malaysia ) the values of Upstream Crude and Palm Oil witnessed a massive rise. Later, a varying trend followed in the previous week. This change in upstream value affected the downstream fats and oils markets significantly.

However, the recent downward correction across the oil palm complex following the removal of Indonesia's export curbs has encouraged more players to increase their palm oil consumption in the last week. Hence, the downstream Fatty Acid market players claimed ample supplies, which further reduced their offers. According to the ChemAnalyst database, the Asian Fatty Acid market exhibited a price drop, approximately 3% in China and 4% in India.

In the world's largest oil-consuming country, China, regardless of the price drop, the complete lockdown for close to a fortnight in Shanghai, the main financial hub, amidst China's zero-Covid policy has put the country's economy under pressure with rising inflation and disrupted global supply chains. Additionally, air cargo rates between Shanghai and Northern Europe are shooting up day by day, with a significant rise of nearly 43% from the level before the outbreak. Most factories and manufacturing units have shut down in China and Taiwan amid lockdown, and the ports are clogged, affecting global trade.

As per ChemAnalyst," The price of Fatty Acid will stay down in the coming weeks with the weak consumer spending habits. The current stockpile of surfactants in Asia is sufficient to meet the market's estimated demand. However, the feedstock palm oil prices may still continue to rise owing to the tight supplies across the global market."