For the Quarter Ending March 2024
North America
Throughout the entirety of the first quarter of 2024, the prices of Palm Oil mirrored market trends in the APAC region. The overall trend in the market was characterized by price increases, driven by several key factors. The market situation in the USA, where price fluctuations were most pronounced, played a crucial role in shaping the pricing trends.
The overall trend in the market was influenced by factors such as a continuous rise in global market demand, geopolitical tensions, resulting in a trade disruption, and fluctuations in the availability of the end products within the market. Supportingly a pronounced dearth of inventories, compelled market players to adjust their quotations to safeguard profit margins, thereby resulting in a higher import momentum.
However, challenges such as supply chain disruptions until mid-Q1, resulted in an imbalanced logistic activity thereby affecting the overall market demand side. Geopolitical tensions and trade disruptions have exacerbated market sentiments. Export hurdles, like rerouting shipping routes through the Cape of Good Hope to bypass the Red Sea, have set off a cascade of repercussions. These include increased shipping expenses, order cancellations, and container movement delays thereby affecting the overall supply-demand side. Moreover, as Q1 concludes in March 2024, the ease in freight cost and appreciation of the dollar against the producing nation’s currency provided some relief to the downstream trades and the suppliers as they were ready to procure the goods at a lower cost.
Asia Pacific
During the first quarter of 2024, the Palm Oil market in the APAC region faced various challenges. Notably, it displayed a high sensitivity to fluctuations in the external oil futures market, leading to frequent price changes, mostly upward. Since January 2024, a rise in domestic demand for biodiesel has boosted Palm Oil consumption, especially in Malaysia, alongside increasing global consumption in emerging markets, driving up demand worldwide and affecting prices in major producers such as Malaysia and Indonesia. Limited inventories among manufacturers and suppliers have compounded challenges in meeting growing overseas demand, while rising input costs have reinforced the upward price trend for Palm Oil. Supporting to this, a significant contributor to the supply constraints was Malaysia's recent decline in palm oil production due to adverse weather conditions caused by Ellino. Additionally, unfavorable weather in other key producing nations in Southeast Asia exacerbated the situation, resulting in reduced output and supply limitations. In response to these challenges, market participants swiftly adjusted their pricing strategies, seizing the opportunity presented by increasing demand to enhance profitability. This proactive stance underscores the industry's ability to adapt to market dynamics and optimize their positions effectively. Furthermore, ongoing geopolitical tensions and volatility in the global economic landscape have kept freight costs high until mid-Q1 2024, adding to market uncertainties. As the quarter progressed, expanding operations in industries reliant on Palm Oil increased pressure on market players to fulfill rising demand, prompting suppliers to raise prices to optimize profit margins. Consequently, the market experienced a significant price surge, signaling a positive outlook for this essential commodity across various industries supported by its weaken availability.
Europe
Throughout the first quarter of 2024, Palm Oil pricing mirrored trends observed in other regions, particularly North America, with the European market displaying pronounced bullish tendencies. This optimistic sentiment was chiefly fueled by increased demand from downstream food and personal care industries, leading to ongoing transactions and constrained inventory levels. Moreover, persistent export hurdles exacerbated the situation, with challenges like shipping line diversions to circumvent the Red Sea resulting in order cancellations and container movement delays. The uncertain supply-demand dynamics have impacted inventory availability among market participants, leading to price increases within the region. Additionally, the market experienced a significant uptick in bulk orders post-holiday season, influenced by production halts in exporting nations like Malaysia and Indonesia, stemming from limited palm fruit availability and heightened palm oil consumption in the biodiesel sector. However, the Euro's depreciation in March added another layer of complexity, making regional imports relatively costly for buyers. This development spurred efforts to replenish inventories and bolstered market resilience. Consequently, Palm Oil prices remained elevated throughout the month, presenting challenges for buyers contending with cost pressures.
For the Quarter Ending December 2023
North America
Throughout the entirety of the fourth quarter of 2023, Palm Oil prices mirrored market trends in the APAC region, exhibiting a mixed pricing trajectory characterized by a significant decline in October, followed by an increase in November, and a subsequent sharp drop as December draws to a close. In October, Palm Oil prices experienced a noteworthy and substantial decrease, leaving stakeholders in industries dependent on it in a state of bewilderment. The primary driver behind this decline was the surplus of Palm Oil in the domestic market. Additionally, the domestic acid market displayed a lack of robust consolidation, featuring moderate trading activity and a stable supply side. Sales were primarily centered around orders, with a strong focus on market transactions.
Moving into November 2023, Palm Oil prices took on a contradictory trajectory, showing a positive upward trend throughout the month. This increase was propelled by a slight improvement in downstream purchasing activity from the domestic sector and an optimistic market outlook. Moreover, rising costs of crucial input materials, including energy and raw materials, contributed to the favorable market conditions for Palm Oil in November.
Global logistical challenges, such as port congestion and container shortages, hindered the smooth transportation of Palm Oil from production hubs to downstream markets. These disruptions led to increased transportation costs and extended delivery lead times, further contributing to the surge in prices. However, as December draws to a close, prices once again experienced a considerable drop, indicating subdued appetite within the market. This, weakened purchasing activity prompted market participants to proactively sell their products at discounted rates, strategically aiming to deplete their stockpiles before the year-end.
Asia Pacific
In the APAC region, the Palm Oil market underwent notable shifts in the fourth quarter of 2023. Prices experienced a decline in October, rebounded in November, and then dropped again as December concludes in Malaysia being one of the significant exporter and producer. As of October 2023, Palm Oil costs decreased, accompanied by a surplus inventory buildup. Industry officials predicted increased production compared to the preceding month's exports. While, market participants, including retailers, suppliers, and traders, maintained sufficient palm oil inventory to meet inquiries from both regional buyers and overseas traders. Moving into November 2023, palm oil prices significantly rose in the Malaysian market compared to the previous month. Influencing factors included the El Nino phenomenon, increased consumption in the food industry, sustained high crude oil prices due to geopolitical risks, and pricing dynamics of other edible oils. Additionally, demand for palm oil in India witnessed a moderate increase, driven by higher demand in both domestic and regional markets, particularly in the biodiesel industry. Contrastingly, as December approached, Palm Oil values, while remaining steady, dropped across the Malaysian market. This decline was attributed to slowing exports, primarily due to reduced offtakes from key importing nations, notably India, exerting downward pressure on prices. Global demand for vegetable oils typically experiences a dip in some consuming countries, particularly within the APAC region. This phenomenon, impacting Malaysia as a major palm oil exporter, left them with higher inventories, prompting a focus on clearing stocks at a lower cost by the end of the year 2023.
Europe
Throughout the final quarter of 2023, Palm Oil prices mirrored the market trends observed in other countries, primarily North America. Initially, in October 2023, the price of Palm Oil in the European market experienced a significant drop, leaving stakeholders in industries reliant on it perplexed. The main factor behind this decline was the abundant supply of Palm Oil in the domestic market. Intermittent entries of palm oil from production areas, coupled with optimistic expectations of a high yield in the new season, continued to exert downward pressure on domestic market prices, thereby impacting the overall market prices. Additionally, sectors such as food and personal care, major consumers of Palm Oil, increasingly engaged in just-in-time purchases, contributing to an overall depreciation in prices. Moving into November, there was a modest uptick in palm oil inquiries driven by a moderate improvement in consumer sentiments within the domestic market. This rise was attributed to heightened demand during the holiday season, leading food manufacturers to pre-stock in anticipation of festive demand. Moreover, businesses showed moderate focus on prioritizing their inventory restocking activities, contributing to market strength. Downstream panel factories aligned their procurement with incoming inquiries, fostering increased bidding and offers among enterprises, thereby influencing market dynamics. However, as December 2023 unfolded, a notable decrease in prices caught the attention of industry players and analysts, indicating a weakened trend that defied earlier projections. This shift in pricing dynamics has implications for both market experts and traders who strategically built-up stocks in anticipation of an expected surge in demand from their respective end-user sectors. Regarding the supply scenario, Palm Oil was readily available, and the procurement of downstream products mainly relied on incoming inquiries from the regional market. In the short term, trade activity faced additional setbacks due to lacklustre demand within the regional market.
For the Quarter Ending September 2023
North America
Throughout the third quarter of 2023, Palm Oil prices reflected the APAC market trends in the North America region, maintaining an optimistic trajectory. Increased demand in the downstream sector and heightened inquiries from the regional market kept prices consistently positive during this period. Additionally, a significant reduction in inventory levels bolstered strong purchasing sentiments. Moreover, transportation costs to the United States experienced a notable increase during the third quarter of 2023, maintaining an upward market sentiment. A continuous rise in both local and global demands played a significant role in boosting oil prices. In terms of logistics, the overall logistics costs surged by 18.6 points, reaching a reading of 175.3 in August. The primary contributor to this surge in costs during August was related to inventory expenses. Several factors contributed to this increase, including limited storage capacity and restocking efforts at major corporations. The restocking initiatives at larger firms were responsible for the slowdown in the decrease of inventory levels. Data on US imports indicates that inventory levels are likely to remain low for the current season. Anticipating future demand and recognizing the challenges in the supply chain, many businesses chose to replenish their inventories for the entire quarter. This bulk ordering led to a surge in demand, further straining the already limited supply, consequently driving prices upward until the end of September. Furthermore, the United States witnessed a significant price hike, primarily due to the escalation in raw material costs, specifically Palm Oil seeds, and increased production expenses.
Asia Pacific
Throughout the third quarter of 2023 in the APAC region, particularly in Indonesia, the Palm Oil market exhibited an overall optimistic sentiment with minor fluctuations on a weekly basis. Increased demand for Palm Oil in India coincided with rising costs of inputs such as fertilizers and insecticides for Palm Oil cultivation, adding to farmers' production expenses. Additionally, delayed monsoons and unseasonal rains affected the global availability of Palm oil, leading to reduced manufacturing and limited supply in the market. Furthermore, Indonesia's Manufacturing PMI rose to 53.9 in August 2023 from 53.3 in the previous month. This marked the 24th consecutive month of expansion in factory activity, reaching the steepest pace since November 2021. Both output and employment experienced the most significant growth in almost a year. New orders surged at the fastest rate in 26 months, and foreign sales increased for the second time in the past 15 months. Firms procured more inputs for production, leading to an increase in purchased stocks. In addition, Indonesia's Consumer Price Index (CPI) rose to 115.44 points in September from 115.22 points in August 2023. Employment growth was moderate, and backlogs of work decreased as companies increased staffing levels to cope with higher production. Purchasing activities saw a rise, and vendor performance improved due to enhanced material availability and more efficient transportation. Concurrently, manufacturers and suppliers focused on maintaining ample Palm Oil stock levels in anticipation of high demand during upcoming festivals. This strategic approach bolstered the market's upward trajectory for the month.
Europe
Throughout the third quarter of 2023, Palm Oil prices experienced a consistent upward trend, mirroring market patterns in other countries, particularly in the United States and the Asia Pacific region. This surge was driven by a significant increase in regional demand and a shortage of stock, leading to higher global Palm Oil prices, including in the European market. Despite Germany's headline inflation rate in August being noticeably lower than in July, economists anticipate a faster decline in the coming months. Lower reservoir levels may lead to higher commodity prices. Preliminary data from the Federal Statistics Office indicates that this month's consumer price growth in the United States was 6.4% higher than the rest of the European Union, rising from 117.10 points in July 2023 to 117.50 points in August. The increase in the cost of necessities like food and energy primarily drove this CPI rise. A shortage of Palm Oil supply, suboptimal crushing activities, and government intervention influenced market dynamics. Additionally, market participants faced domestic supply shortages due to a persistent surge in inquiries, reinforcing the upward trajectory of Palm Oil prices.
For the Quarter Ending June 2023
North America
During Q2 2023, palm oil prices in North America followed the market trends of Asia Pacific. At the start of Q2, palm oil prices increased throughout the region. The main reason for this was the temporary export ban imposed on exporting nations, mainly Indonesia, prior to Ramzan, which impacted the supply of cooking oil in the country. Domestic suppliers and traders, however, were purchasing as much as possible as they feared a shortage. On the other hand, after April, prices decreased significantly and ended Q2 on a negative note. Imports from Indonesia fell during May, but refiners, traders, and suppliers managed to buy more from other nations, including Malaysia. Refiners, traders, and suppliers were able to purchase more palm oil from other countries, including Malaysia. In addition, the earlier decrease in imports and the price correction in June encouraged buyers to buy more palm oil in June. Buyers tend to prefer palm oil as it is more affordable at a lower rate than other oils. Palm oil continued to trade at a low cost compared to soybeans this month, partly due to higher Malaysian palm oil stocks.
Asia Pacific
Across the entire APAC region, where Malaysia and Indonesia are the largest exporters, the Palm Oil prices in Indonesia and Malaysia followed a declining market trend. The world’s largest vegetable oil exporter tightened its export quota for palm oil to contain rising domestic cooking oil prices ahead of Ramzan. At the start of the second quarter, higher demand in Indonesia during the holy month of Ramadan drove up palm oil prices. However, as the second quarter progressed into mid-Q2, prices started to drop sharply as the Indonesian government reduced export taxes on crude palm oil to contain increasing domestic cooking oil prices. The government said the export restrictions were needed to ensure sufficient cooking oil for domestic consumption, which was lifted at the end of June. The prices remained low until the end of Q2 and settled at $830. Similarly, in the Malaysian market, palm oil production increased in the middle of Q2, supported by a substantial increase in export activity. The increase in palm oil production was mainly due to amended palm oil yields in recent months due to improved weather conditions, better agricultural practices, harvest season, and ease of labor shortage, which led to increased availability among merchants. This, in turn, led to a decrease in palm oil prices till the very end of Q2. The price of palm oil in Malaysia was valued at $860 at the end of June.
Europe
Throughout the European region, the prices of Palm Oil improved with the beginning of the second quarter. The importing activity was moderate, while the supplies from exporting nations, primarily Indonesia, one of the largest exporters of palm oil, were weak, which affected the overall market trend until April 2023. Moreover, moving towards the middle of the q2, the prices fell considerably across the globe benefitting the merchants and traders as palm oil was available at cheaper rates. The increased demand for edible oils, including palm oil, across the European region, despite higher availability of domestic supplies, suggests a changing consumption pattern and growing preference for imported oils. The surge in imports of palm oil was attributed to easy availability at a lower price and changing climatic conditions owing to which the merchants and traders focused on raising their domestic inventories and, as a result of disrupted trade momentum so that they could destock their inventories at higher rates when inquiries from domestic market resurged.
For the Quarter Ending March 2023
North America
In North America, due to an unstable market for demand from downstream industries, the price of palm oil fluctuated in the first quarter of 2023. Product prices decreased because of the ease of supply from Indonesian palm oil producers during the first part of Q1 2023. The majority of the palm oil imported by North American countries comes from nations in the Asia Pacific, particularly Indonesia, and Malaysia. In the first half of Q1 2023, the product's price decreased because of excess inventory in its local market. Even so, prices rose in the final month of the quarter as a result of a decline in imports from important exporting nations, particularly Indonesia, as Ramadan approached. The abrupt easing of the Indonesian ban resulted in continued demand from the downstream industries and a drop in the product's price.
Asia Pacific
In the Asia-Pacific countries, the price of Palm Oil fluctuated throughout the Q1 of 2023, owing to the unstable market sentiments toward Palm Oil. During the first half of 2023 Q1 In China, the market for palm oil continued to decline, which helped to maintain the falling prices. Following Indonesia's reduction of its export tax, the largest producer of palm oil in the world, the price of palm oil in Malaysia's futures market has been falling. Domestic palm oil futures have fallen along with the market as a result of this. Prices fell in the second month of the quarter, supported by substantial domestic market inventories. The price rose in the second half of Q1 of 2023 as a result of increased demand from end-user industries due to the holy month of Ramadan. Towards the end of Q1 2023, the price of Palm Oil was recorded to be USD 1115/MT for FOB Shenzhen, China, in March 2023.
Europe
In Europe, the price of palm oil fell throughout the first quarter of 2023, supported by the product's lower price in the months that followed the first-quarter period. Prices decreased throughout the first half of Q1 of 2023 as a result of weakening confidence among customers in the domestic market. In spite of having a lot of stock, there were no supply disruptions in the local market. Indonesia lifting its export prohibition helped to lower prices in the second part of Q1 of 2023, but this had no long-term consequences for the European region. However, because there was a lack of demand and an abundance of supply, prices started to drop again in European countries.
For the Quarter Ending December 2022
North America
In North America, due to a decline in demand from downstream industries, the price of Palm Oil declined in the fourth quarter of 2022. Due to the lifting of the prohibition on Indonesian Palm Oil exports during the first half of Q4 2022, product prices declined. Countries in the Asia Pacific, especially Indonesia and Malaysia, are where North American nations import their Palm Oil. Due to an abundance of inventory in its local market, the product's price was reduced in the second half of Q4 of 2022. The abrupt lifting of the embargo from Indonesia led to sustained demand from the downstream sectors and a decrease in the price of the product. Towards the end of Q4 2022, the price of Palm Oil was recorded to be USD /MT for the USA in September 2022.
Asia Pacific
In the Asia-Pacific countries, the price of Palm Oil fluctuated throughout the Q4 of 2022, owing to the unstable market sentiments toward Palm Oil. During the first half of 2022 Q4 In China, the market for palm oil continued to decline, which helped to maintain the falling prices. Following Indonesia's reduction of its export tax, the largest producer of Palm Oil in the world, the price of palm oil in Malaysia's futures market has been falling. Domestic Palm Oil futures have fallen along with the market due to this. Prices fell in the second month of the quarter, supported by substantial domestic market inventories. The price rose in the second half of Q4 of 2022 due to increased demand from end-user industries. Towards the end of Q4 2022, the price of Palm Oil was recorded to be USD 1150/MT for FOB Shenzhen, China, in December 2022.
Europe
In Europe, the price of Palm Oil fell throughout the fourth quarter of 2022, supported by the product's lower price in the months that followed the fourth-quarter period. Prices fell in the first half of Q4 of 2022 because of lagging consumer confidence in the domestic market. There were no supply interruptions in its local market because of huge stocks. Prices were lowered in the second half of Q4 of 2022, supported by Indonesia easing its export ban, which had no long-term effects on the European region. However, because there was little demand and plenty of supply in the European nations, prices once more began to decline. Towards the end of Q4 2022, the price of Palm Oil was recorded to be USD /MT for Rotterdam Netherlands in September 2022.
For the Quarter Ending September 2022
North America
In North America, due to a decline in demand from downstream industries, the price of Palm Oil declined in the third quarter of 2022. Due to the lifting of the prohibition on Indonesian Palm Oil exports during the first half of Q3 2022, product prices declined. Countries in the Asia Pacific, especially Indonesia and Malaysia, were where North American nations imported their Palm Oil. Due to an abundance of inventory in its local market, the product's price was reduced in the second half of Q3 of 2022. The abrupt lifting of the embargo from Indonesia led to sustained demand from the downstream sectors and a decrease in the price of the product. Towards the end of Q3 2022, the price of Palm Oil was recorded to be USD1590/MT for the USA in September 2022.
Asia Pacific
In the Asia-Pacific countries, the price of Palm Oil decreased throughout the Q3 of 2022, owing to the decreased demand in the market sentiments toward Palm Oil. In the first half of Q3 of 2022 In China, the prices decreased, and it was supported by the market for palm oil, which continued to fall. The price of palm oil in Malaysia's futures market has been declining after Indonesia, the world's largest producer of Palm oil reduced its export tax. This has caused domestic palm oil futures to decline along with the market. The mainstream quotation dropped as the market kept falling. In the second half of Q3 of 2022, the prices decreased, backed by high inventories in its domestic market. Towards the end of Q3 2022, the price of Palm Oil was recorded to be USD 1100/MT for FOB Shenzhen, China, in September 2022.
Europe
In Europe, the price of Palm Oil fell throughout the third quarter of 2022, supported by the product's lower price in the months that followed the third-quarter period. Prices fell in the first half of Q3 of 2022 because of lagging consumer confidence in the domestic market. There were no supply interruptions in its local market because of huge stocks. Prices were lowered in the second half of Q3 of 2022, supported by Indonesia easing its export ban, which had no long-term effects on the European region. However, because there was little demand and plenty of supply in the home market in European nations, prices once more began to decline. Towards the end of Q3 2022, the price of Palm Oil was recorded to be USD 1040/MT for Rotterdam, the Netherlands, in September 2022.
For the Quarter Ending June 2022
North America
In North America, the price of Palm Oil increased in the Q2 of 2022, owing to the demand from the downstream industries. In the first half of Q2 of 2022, the product price was increased due to the ban on Palm Oil export from Indonesia. North American countries import their Palm oil from Asia Pacific countries, including Indonesia and Malaysia, primarily from Indonesia. In the second half of Q2 of 2022, the product's price was still upward due to limited stock in its domestic market. Due to the sudden sanctioning of the ban from Indonesia, there was immense demand from the downstream industries, resulting in a soaring product price.
Asia Pacific
In the Asia-Pacific countries, the price of Palm Oil fluctuated throughout the Q2 of 2022, owing to the instability in the market sentiments toward Palm Oil. In the first half of Q2 of 2022, the prices increased due to demand from the end-use industries like food sectors, including domestic households. The global inflationary pressure on Indonesia has compelled them to ban Palm Oil in the second half of April 2022 due to less availability of Oil in its domestic market. In the second half of Q2 of 2022, the prices decreased, backed by an ongoing ban resulting in high inventories in its domestic market.
Europe
In the European country, the price of Palm Oil fluctuated throughout the Q2 of 2022, backed by the unstable price of the product in respected months. In the first half of Q2 of 2022, the prices decreased due to the domestic market's weak buying sentiments. Due to high inventories, there were no supply disruptions in its local market. In the second half of Q2 of 2022, the prices were increased, backed by sanctioning of an export ban by Indonesia which hasn't affected the European region in the long run. However, the prices were again wrapped up in a downward trajectory due to less demand and ample stock in the domestic market of European countries.
For the Quarter Ending March 2022
North America
In the first quarter of 2022, the prices rose to record highs. At the onset of the first half of Q1, the major producer and exporter of palm oil hit heavy rains led to a production halt. Due to logistic issues, suspended milling and transportation activities led to soaring prices globally. Because of covid also, the market suffered from supply shortages. With the onset of the second half of Q1 2022, the prices surged even more as the Russia Ukraine conflict resulted in a halt in the export of sunflower oil. Also, with the increasing demand from end-user enterprises like the cosmetics industry, the prices fluctuated in the region.
Asia Pacific
In the first quarter of 2022, the palm oil prices gradually increased every subsequent month. The primary factors to govern the price trajectory were labor shortage, persistent weather disruption in Malaysia, and Russia Ukraine war crisis. At the onset of Q1 2022, the prices increased owing to heavy rainfall which slowed palm oil production. Processing activities like milling and transportation have been suspended due to logistic issues and road closures, creating supply shortages in domestic markets. At the commencement of the second half of Q1 2022, the Russia Ukraine conflict rose the already hiked up prices with route disruption and a tight trading market. Towards the end of the month, the prices were recorded as USD 1629/ton FOB Klang (Malaysia).
Europe
In the first quarter of 2022, palm oil prices increased due to disrupted supply and strong demand. Malaysia, the prominent exporter and producer of palm oil, was hit by typhoons and heavy rains, which had a significant impact on the palm oil production affecting the global supply chain of palm oil. The limited palm supplies followed by a halt in the export of sunflower oil due to the Russia Ukraine have sent global vegetable oil prices to record highs. The surging demand from downstream industries like biodiesel plants and end-user enterprises also contributed to increased palm oil market prices. Towards the end of Q1 2022, palm oil prices were recorded as USD 1803/ton CFR Rotterdam (Netherlands).
