For the Quarter Ending June 2023
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.
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.
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
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.
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.
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.
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.
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.
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.