Indonesia to Revoke Export Ban: Global Fatty Acid Prices to be Bullish
- 30-May-2022 4:43 PM
- Journalist: Bob Duffler
Delhi NCR, India: The international Fatty Acid market showcased a steady inclination due to sky-high Palm oil prices amid an ongoing global oil crisis. According to the United States Food and Agriculture Organization, the prices of edible oils in 2022 jumped by nearly 250 percent compared to the standard price levels.
Over the last two years, labour limitations, climate change, and violent conflict have contributed to the current oil crisis. Covid lockdowns led to labour restrictions as the pandemic spread rapidly across six continents, affecting production sites and processing facilities in strategic locations such as Indonesia and Malaysia. These two countries account for the most palm oil worldwide. The palm oil market is gripped by uncertainty regarding domestic market obligations (DMO), which Indonesia has stated will permit palm oil exports. Traders and analysts said that the market is waiting for a clear image.
According to the latest insights, Indonesia will likely reimpose its Domestic Market Obligation (DMO) policy on palm oil. The export of Crude Palm Oil (CPO) and Refined Bleached Deodorized (RBD) palm oil shipments are expected to be banned. Consequently, Palm oil prices have increased by more than 4 percent this week on Bursa Malaysia Derivatives (BMD) exchange.
Additionally, logistic concerns, particularly in container markets, added pressure to the global downstream surfactant players. The unplanned shutdown of LyondellBasell and Sasol’s JV US Lake Charles, Louisiana, further tightened the supplies. Moreover, some southeast Asian factories were also doing their typical annual maintenance. Overall demand remained healthy to strong and outpaced the supplies.
As per ChemAnalyst, “the Fatty Acid market is likely to stay upward price trajectory across the global market. The logistic constraints are expected to remain persistent in southeast Asia due to ongoing lockdowns in China, as many containers are tied up in the Chinese ports. Terminal demand is healthy, but concerns over price rises affect forward sentiment.”