Climate and Farming Impact (2024)
Erratic weather—including excessive rains and droughts—affected palm fruit development and oil extraction efficiency. The resulting lower crude palm oil output reduced PFAD byproduct volumes. Simultaneously, rising demand from industrial soap producers and oleochemical manufacturers intensified global competition. New environmental and traceability regulations, especially in Europe, caused export delays and further constrained PFAD availability, amplifying price pressures.
Feedstock & Logistic Disruptions (2023)
Adverse weather events in key Southeast Asian producing regions lowered palm oil yields, reducing feedstock availability for PFAD. Concurrently, port congestion, vessel shortages, and elevated freight rates created logistical hurdles. Volatile crude palm oil prices also impacted refining margins, resulting in irregular PFAD supply and heightened market fluctuations.
Russia-Ukraine War (2022)
The conflict disrupted global edible oil flows, especially sunflower oil, leading buyers to seek alternatives such as PFAD. Increased interest in PFAD for biofuel blending and soap production pushed global demand higher. Meanwhile, the war-induced surge in fertilizer and energy costs inflated production expenses throughout the palm oil value chain, contributing to elevated PFAD prices.
Post-COVID Demand Recovery (2021)
As economies reopened, demand for PFAD rebounded strongly, particularly in the soap, detergent, and animal feed sectors. Importing countries across Africa, South Asia, and the Middle East sought to replenish depleted inventories. However, lingering labour shortages in Malaysia and Indonesia hindered refinery throughput, creating tight supply conditions and driving PFAD prices upward.
The COVID-19 Pandemic (2020)
Global lockdowns and movement restrictions severely disrupted the palm oil industry, directly impacting PFAD production. Labor shortages, reduced refinery utilization, and logistical bottlenecks led to processing delays. With industrial demand from soap manufacturing, animal feed, and oleochemicals temporarily declining, surplus PFAD stocks accumulated. This resulted in significant price volatility and widespread market uncertainty.
