For the Quarter Ending June 2025
North America
• Palm Kernel Oil spot price trends in North America showed an overall downward trajectory in Q2 2025, with an average quarter-over-quarter price decline of approximately 7.8%, ending June near USD 1695/MT. The market reflected bearish sentiment amid improved global supply and cautious demand.
• Palm Kernel Oil Production cost trends during the quarter saw gradual easing, helped by relaxing freight costs and recovering palm kernel extraction rates in Southeast Asia, lowering landed costs for U.S. importers.
• Palm Kernel Oil Demand outlook remained subdued across the quarter as key downstream industries like personal care, oleochemicals, and food processing scaled back purchasing amid inflation concerns and inventory destocking.
• Import volumes stayed steady but buyers maintained a procurement-on-demand strategy, limiting inventory buildup against a backdrop of global oversupply and cautious market sentiment.
• In June 2025, prices initially softened due to improved shipment availability and lower feedstock costs but rebounded late in the month driven by tightening export supplies from Southeast Asia and speculative buying, with spot prices at around USD 1695/MT CFR Houston.
• Freight rates on Asia-to-U.S. routes declined by 8-10% from May levels, supporting downward pressure on production and import costs.
• The market outlook for the next quarter suggests continued cautiousness with moderate price stability or mild downward adjustments, depending on global supply normalization and demand recovery pace.
• Increased upstream supply and improved refining stability in key Southeast Asian sources, particularly Malaysia and Indonesia, supported steady product availability during the quarter.
• Domestic refining operations faced minimal technical disruptions, enabling consistent output despite softening demand for fractionated derivatives like lauric acid and MCTs, affecting overall market dynamics.
• Policy watch remains on potential shifts in import tariffs and crude oil price fluctuations that could impact biofuel blending demand, an important driver of Palm Kernel Oil spot price movements in the U.S.
APAC (China)
• Palm Kernel Oil spot price in China experienced a clear downward trend in Q2 2025, with average quarter-over-quarter prices falling by roughly 13%, closing near USD 1551/MT by June-end amid oversupply and soft demand conditions.
• Palm Kernel Oil Production cost trends in the quarter reflected competitive pricing arising from robust export volumes from Indonesia and Malaysia, supported by favorable weather and strong harvesting output.
• Palm Kernel Oil Demand outlook exhibited weakness, especially in oleochemical, personal care, and food processing sectors, with cautious buying and inventory drawdowns prevailing amid economic uncertainties.
• June 2025 price behavior showed a modest recovery late in the month, driven by supply tightening and renewed oleochemical demand, with prices moving upward after weeks of subdued activity.
• Logistical restraints and currency movements earlier in the quarter influenced import landed costs, though these pressures eased by late June.
• Market participants generally preferred hand-to-mouth purchasing with limited speculative activity, maintaining downward pressure on overall Palm Kernel Oil spot price levels.
• Forward-looking forecasts indicate the potential for continued price softness unless demand picks up significantly or supply disruptions emerge in producer countries.
• Seasonal Palm Kernel Oil demand dipped post-spring holidays, especially impacting downstream food and personal care product makers, contributing to subdued consumption.
• Inventory accumulation at coastal ports remained high through the quarter, intensifying supply pressure on prices.
• Regulatory and sustainability frameworks in supplier countries continue to influence production cost trends and supply strategies, shaping medium-term market dynamics.
Europe (Germany following APAC-China overall downward trend)
• Germany’s Palm Kernel Oil market followed the APAC-China downward quarterly trend in Q2 2025, with average quarter-over-quarter price declines like those in China, and spot prices finishing the quarter at softer levels.
• Palm Kernel Oil Production cost trends within Europe reflected a combination of benefits from stable global supply and rising input expenses related to energy and transportation, which tempered cost reductions.
• Palm Kernel Oil Demand outlook remained cautious as inflationary pressures and competition from alternative oils restrained procurement from food manufacturers and industrial end-users.
• June 2025 market conditions showed marked price softness paralleling global oversupply; German buyers reduced inventories and deferred purchases amid uncertain economic recovery signals.
• Palm Kernel Oil Supply chain improvements enhanced physical availability of Palm Kernel Oil, but competitive seller tactics and careful buyer positioning kept price levels under downward pressure.
• Palm Kernel Oil Forecasts for the next quarter predict continued price softness or stabilization at subdued levels, influenced by economic developments across key industrial sectors.
• European sustainability regulations and import duties shaped sourcing preferences, prompting greater attention to certified sustainable Palm Kernel Oil and influencing contractual terms.
• Ongoing trade uncertainties related to Brexit introduced logistical challenges affecting delivery schedules and pricing strategies among EU and UK market participants.
• Currency exchange volatility, notably fluctuating in the euro-dollar rate, remained a critical factor in import pricing and market sentiment.
• Environmental compliance and consumer demand for sustainable products sustained strategic emphasis within supply chains, affecting cost structures and pricing negotiations.
For the Quarter Ending March 2025
North America
In Q1 2025, the Palm Kernel Oil (PKO) market in North America experienced a gradual transition from initial supply constraints to a more balanced environment. At the beginning of the quarter, low inventory levels and limited shipments from major producing nations created upward pressure on prices. However, as the quarter progressed, revised production forecasts from key exporters like Malaysia and Indonesia eased earlier concerns. The improved supply outlook helped stabilize the market, while demand-side factors remained sluggish, leading to a generally soft pricing environment.
Weak export demand, particularly from the food and oleochemical sectors, limited price momentum. Downstream buyers showed restraint amid intensified competition from alternative vegetable oils such as soybean and sunflower oils. Additionally, a decline in biofuel blending demand—linked to lower crude oil prices—further weighed on PKO consumption. Currency fluctuations and broad global economic uncertainty also dampened import interest, prompting traders to focus on clearing existing stockpiles rather than pursuing fresh imports. This contributed to a month-to-month stagnation in prices despite supply-side improvements.
Overall, the North American PKO market in Q1 2025 exhibited a volatile yet subdued trend. Prices remained relatively flat across the quarter, reflecting a market caught between easing supply pressures and persistently weak demand fundamentals. The near-term outlook remains stable to slightly bearish, with future trends hinging on global production dynamics and end-user recovery.
Asia Pacific
In Q1 2025, Malaysian Palm Kernel Oil (PKO) prices exhibited significant volatility, marked by an overall bearish trend. January began with notable price declines due to oversupply, weak downstream demand, and rising competition from cheaper edible oils like soybean and sunflower oil. Export volumes fell sharply as international buyers, particularly from the Netherlands and China, shifted preferences. The strengthening of the Malaysian ringgit and declining crude oil prices further weakened global competitiveness and biodiesel-related demand.
February showed a transitional phase. Prices remained under pressure in the first half, driven by persistent inventory buildup and muted demand. However, a recovery emerged in the latter half due to tighter supplies, improved global market sentiment, and the temporary suspension of operations by FGV Holdings Berhad. This supply disruption triggered a short-term rally, as international buyers resumed procurement and crude palm oil prices strengthened in tandem, offering brief relief to the PKO market.
In March, the market once again softened due to weak international demand and elevated inventories. Although demand from African and Middle Eastern markets offered some support, it wasn’t enough to counterbalance declining interest from key importers. By late March, the market stabilized slightly, but overall, Q1 ended with a cautious, bearish tone.
Europe
During Q1 2025, Palm Kernel Oil (PKO) prices in the Netherlands displayed a predominantly downward trend with intermittent recoveries driven by shifting supply-demand dynamics and external market influences. In January, prices dropped sharply due to weak downstream demand from food, cosmetics, and oleochemical sectors, exacerbated by high inventories and reduced industrial activity. Regulatory scrutiny on palm oil derivatives and a depreciating euro further strained the market. However, in the final week, a slight rebound emerged as Malaysian PKO prices rose and the euro appreciated against the dollar, improving import conditions.
In February, PKO prices remained volatile, initially soft due to ample availability and subdued industrial demand. Mid-month, prices began to rise as weather-related disruptions in producing countries led to tighter supply. Although demand in pharmaceutical and oleochemical sectors stayed seasonally low, modest recovery in food and cosmetics sectors supported a gradual rebound. Traders responded to reduced availability with higher quotations, pushing prices to around USD 1932/MT CFR Rotterdam by month-end, though overall sentiment stayed cautious due to lingering logistical and demand uncertainties.
March witnessed renewed downward pressure, with the market impacted by persistent oversupply, soft demand, and tightening EU regulations on deforestation-linked commodities. The euro’s continued depreciation inflated import costs, limiting bulk purchases. Despite a brief mid-month recovery, the quarter concluded with a bearish tone, as market participants favored conservative, just-in-time buying strategies amid ongoing supply-demand imbalance.
For the Quarter Ending December 2024
North America
During the entire Q4 2024, the U.S. Palm Kernel Oil (PKO) market was significantly influenced by the global rise in PKO prices, particularly due to tight supply conditions and increased demand. The upward trajectory of prices globally, fueled by weather disruptions in major producing countries like Malaysia and rising export demand, led to heightened procurement costs in the U.S. market.
The seasonal surge in demand from the food, cosmetics, and biofuel industries in the lead-up to the holiday season placed further pressure on U.S. importers to secure adequate supplies, driving up import prices. Furthermore, the U.S. economy experienced cautious sentiment as global economic factors, including oil price fluctuations and potential monetary policy shifts from the U.S. Federal Reserve, created uncertainty in commodity markets. Nevertheless, U.S. importers and traders were compelled to adjust to the rising PKO prices, with the strong demand from food and oleochemical sectors ensuring that the U.S. market remained active.
The appreciation of the U.S. dollar relative to other major currencies, including the Malaysian ringgit, partially mitigated the impact of higher PKO costs for U.S. buyers, but the overall market sentiment remained cautious as PKO prices rose due to the tightening of global supplies and robust seasonal demand.
Asia Pacific
In Q4 2024, Malaysia's Palm Kernel Oil (PKO) market saw rising prices driven by tight supply and strong global demand. Adverse weather, including monsoons, reduced palm kernel yields, limiting raw material availability. The depreciation of the Malaysian ringgit also raised production costs while making exports more competitive. Rising demand, particularly from the food, cosmetics, and biofuel industries ahead of the festive season, further fueled price increases. The Manufacturing PMI in Malaysia remained at 49.5 in October, reflecting five months of factory decline, though foreign sales saw growth due to stronger demand from Asia-Pacific. PKO stock levels fell by 6.32% to 1.88 million tonnes in October, creating supply constraints. By late November and December, supply chain disruptions, labor shortages, and adverse weather worsened output, driving up prices. Increased export demand ahead of anticipated price hikes also contributed. Additionally, sustainability regulations, such as RSPO compliance, raised production costs. Prices dipped temporarily in mid-December due to weakening rival oils and a drop in the ringgit. However, underlying demand from global markets, along with recovering soybean oil prices, suggested potential stabilization. The market remains favorable, with traders adjusting strategies to maintain a positive outlook.
Europe
In Q4 2024, Germany's palm kernel oil market followed global trends with rising prices driven by tighter supplies and geopolitical factors. In October, European prices surged, supported by heightened global demand and supply constraints caused by adverse weather in key producing regions. Limited availability in the Netherlands further exacerbated price hikes, while the depreciation of the Euro against the U.S. dollar bolstered export prices. November saw continued volatility in the Netherlands, influenced by supply chain disruptions and fluctuating demand. Logistical challenges and delays from major producers like Thailand and Malaysia affected supply consistency, while global crude oil price fluctuations added to price uncertainty. Demand remained uneven, with higher consumption in the oleochemical sector and restocking periods. Refining capacity fluctuations and inventory levels also contributed to price oscillations. In December, Crude Palm Kernel Oil (CPKO) prices surged due to tight supply, rising crude palm oil futures, and stricter sustainability regulations. Export restrictions from key producers like Indonesia further constrained the market. While coconut oil prices remained stable, palm kernel oil import prices in the Netherlands continued to rise, reflecting strong demand for sustainable oils and currency fluctuations.
For the Quarter Ending September 2024
North America
Throughout Q3 2024, North American Palm Kernel Oil prices experienced a significant increase, aligning with broader trends in the Asia-Pacific region. This rise was propelled by both supply and demand factors, notably robust demand from end-user sectors that drove importers to focus on building inventories. Market players, responding to these favorable conditions and aiming for profitability, refined their pricing strategies to capitalize on this trend and sustain competitive positioning.
Furthermore, the situation was further exacerbated by slowing production growth in key producing nations including the Malaysia and Indonesia, the world’s leading Palm Kernel oil producers. Persistent high demand from major importing nations including the United States collectively resulted in a strained supply side, making it difficult for merchants to keep up with the continuous rise in demand. Additionally, a consistent rise in freight costs contributed to the elevated pricing environment, as logistical expenses added another layer of cost that market participants factored into their strategies.
Overall, the market sentiment throughout the quarter remained positive, underpinned by strategic pricing adjustments and inventory management efforts. The edible oil sector showcased adaptability, with traders navigating changing conditions to maximize gains while reflects a dynamic and growth-oriented period for the North American Palm Kernel Oil market, with resilient demand and pricing tactics helping to shape a bullish outlook in the broader edible oil landscape.
Asia Pacific
Moving forward to Q3 2024, the Palm Kernel Oil pricing in the APAC region remained robust, reflecting a consistent market sentiment, driven by a confluence of factors. Strong demand from various sectors, including food, biofuels, and oleochemicals, played a significant role in fueling the price surge. Merchants consistently encountered significant hurdles in the broader supply landscape due to insufficient inventories, which posed challenges in replenishing stocks. This shortfall impeded their ability to meet the rising demands and inquiries from both downstream sectors and the overseas market. The situation was further exacerbated by slowing production growth in Malaysia and Indonesia, the world’s leading Palm Kernel oil producers. Persistent high demand from major importing nations like India and China also contributed to the robust Palm Kernel oil prices.Malaysia witnessed substantial price changes, reflecting the broader regional trends. Importing regions strategically capitalized on currency fluctuations, adopting cost-effective procurement strategies to mitigate financial risks amidst dynamic market conditions. This preference for long-term contracts signifies a high level of confidence among market participants regarding the trading sentiment of Palm Kernel Oil demand and pricing trends throughout the quarter. Overall, the market exhibited more than around 23% increase from the previous quarter, highlighting the steady upward trajectory in pricing. Ending the quarter on a high note, the latest price of USD 1320/MT of Crude Palm Kernel Oil FOB Klang from Malaysia solidified the overall increasing sentiment in the pricing environment.
Europe
In Q3 2024, the European Palm Kernel oil market witnessed a significant upward trend in prices, driven by a complex interplay of global and regional factors. High global demand, supply constraints, and macroeconomic fluctuations all contributed to the price surge. Market disruptions, compounded by adverse weather conditions in major producing regions, led to delayed shipments and limited availability of spot market goods thereby leading the suppliers within the region to raise their selling prices of already accumulated stocks. The Netherlands experienced the maximum price changes, with traders facing challenges in meeting the robust demand. As consumers and businesses competed for a limited supply, the inability to meet this demand exacerbated the supply-demand imbalance. Market speculation and consumer sentiment played a role in amplifying these price hikes; anticipating further increases, market participants engaged in speculative purchasing, further tightening supply. Overall, the quarter saw a 24% increase in prices compared to the previous quarter. Overall, the pricing environment has been positive, marked by steady price rises. The quarter-ending price for Crude Palm Kernel Oil CFR Rotterdam in the Netherlands stood at USD 1520/MT, reflecting the ongoing upward trajectory in prices.
FAQ:
Q1: What is the current trend in Palm Kernel Oil prices across major global markets?
In Q2 2025, Palm Kernel Oil (PKO) prices exhibited a downward trend across North America, China, and Europe. North America saw a 7.8% decline, ending June near USD 1695/MT. China's market dropped about 13% to around USD 1551/MT, while Germany mirrored China’s softness due to global oversupply and cautious demand from key downstream sectors.
Q2: Who are the top global producers and exporters of Palm Kernel Oil?
The leading global producers and exporters of Palm Kernel Oil include Indonesia and Malaysia, which dominate due to their vast oil palm plantations and efficient extraction facilities. Key exporters include Wilmar International, IOI Corporation, Musim Mas, and Sime Darby Plantation, supplying refined PKO to major consumer markets across North America, China, and the EU.
Q3: What are the key factors driving the decline in Palm Kernel Oil prices during Q2 2025?
Several factors contributed to the Q2 2025 price decline: increased export volumes from Southeast Asia due to favorable weather, easing freight costs, high inventories in China’s coastal ports, and reduced buying from the personal care and food sectors. Additionally, cautious hand-to-mouth procurement strategies amid inflation weighed on market momentum globally.
Q4: What is the short-term outlook for Palm Kernel Oil pricing in global markets?
The short-term outlook suggests price stabilization or further mild declines. While late-June tightening in Southeast Asian exports spurred a brief recovery, continued high inventories, soft demand, and macroeconomic uncertainty are expected to limit sharp rebounds. Market watchers are also monitoring sustainability policies and tariff shifts for potential price impacts.
