For the Quarter Ending June 2022
Oleic acid costs climbed in the second quarter of 2022 in the North American market, continuing a trend of rising prices. The lack of resources for palm oil in countries that manufacture products and inadequate supply of materials from exporting nations owing to port congestion also contributed to the increase in oleic acid costs during the quarter. Throughout the time period, fewer supplies of oleic acid were available to meet the demand from the downstream cosmetic business. Due to the increased demand for downstream products, North America saw a continuation of the pricing trend upward during the first quarter. Additionally, the cost of transportation increased due to the lack of shipping containers. Furthermore, the region's increasing need for paracetamol was influenced by the high prevalence of fever and headache.
Due to a lack of palm oil, Oleic Acid prices increased during the second quarter of 2022. The export of raw palm oil was prohibited in order to reduce the cost of cooking oil, which also led to the increase in the price of resorcinol. Due to the labour issue in Malaysia, there is a growing demand for oleic acid, but there is also a limited supply. Increased demand from downstream industries, including the personal care sector, led to tightening market attitudes. Due to a labour shortage, Asia is experiencing rising demand with limited supply, which has led to higher costs for raw materials and oleic acid upstream.
In the second quarter of 2022, Oleic Acid prices in the European region kept rising steadily. The rising costs of oleic acid across the region have been mostly attributed to the increased palm oil futures this quarter. The region's market trend for oleic acid has been further aggravated by protracted supply bottlenecks, labour shortages, port congestion, and high freight prices. Demand-wise, offtakes were consistent during Q2 2022. Due to the high palm oil price in Asian countries, the oleic acid levels increased dramatically toward the middle of the quarter. Oleic acid prices rose in the European region due to steady demand from the cosmetics and other downstream industries during the winter and unpredictable supplies due to global supply-chain interruptions.
For the Quarter Ending March 2022
Prices of Oleic acid followed an upward trend, and the values increased in the North American market in the 1st quarter of 2022. Inadequate supply of materials from exporting countries due to port congestion and lack of the palm oil resources in manufacturing countries further led to the rise in the prices of Oleic Acid throughout the first quarter. Supplies of Oleic Acid to fulfill the demand from the downstream cosmetic industry remained less throughout the period. Oleic Acid prices in the US market were recorded at USD 3160 per tonne in February 2022.
Prices of Oleic Acid fluctuated in the Asian region during the first quarter of 2022. In February, feedstock palm oil prices increased significantly, which led to the rise in Oleic Acid values during the second half of Q1-2022. In Asia, the supply was deemed less than the demand due to the inadequate availability of palm oil in the Asian countries. High cost of raw materials led to rise in its downstream prices like Oleic Acid in Asia. Prices of Oleic Acid settled at USD 2109.8 per tonne in India and USD 2270 per tonne in Malaysia at the end of the first quarter.
Price trend of Oleic Acid remained firm in the European market in Q1-2022. The Oleic acid values rose significantly during the mid-quarter due to the high cost of palm oil in the Asian Countries. Due to the consistent demand from the downstream cosmetic and other industries during wintertime and uncertain supplies due to global supply-chain disruptions, the values of Oleic acid increased in the European region. In Germany, the prices settled at USD 3090 per tonne by the end of Q1 2022.
During the fourth quarter of 2021, the prices of Oleic Acid rose effectively across the Asia Pacific region on the back of the increased palm oil prices. In the Indian domestic market, the Oleic Acid prices escalated from USD 1801.72/MT to USD 1972.86/MT CFR JNPT from October to December.The price of the product remained on the higher side in India due to the prevalent demand pattern in comparison to its supplies. The Ex-Mumbai Oleic Acid prices were assessed at USD 2013.25/MT in November. The exports from Malaysia were observed high during November with respect to its competitor Indonesia due to a marginal reduction in its tax duties. The surge in the palm oil prices consistently pushed up the Oleic Acid production cost throughout the quarter. Furthermore, many traders were compelled to divert their cargoes of palm oil toward essentials, as consumers were facing a huge burden of high prices due to the prolonged scarcity of palm oil. Several factors affected the demand trend of Oleic acid as well as other palm oil derivatives in the country, including high freight cost, other logistical issues, and domestic consumption.
The prices of Oleic Acid continued to hop upwards in the 4th quarter of 2021 across the European region. The increased Benchmark palm oil futures in quarter four have largely contributed to the increased prices of Oleic acid across the region. The prices of agricommodity, i.e., crude palm oil, which is vital to Malaysian exports, reached new highs due to the reduction in the tax duties. The prolonged supply bottlenecks, labor shortages, port congestion, sudden spread of Omicron, and high container freight rates have further exacerbated the market trend of Oleic Acid across the region. In terms of demand, offtakes remained stable throughout Q4.