palm oil Pricing Assessment

Markets Covered:

Indonesia

Malaysia

United States

China

India

Netherlands

Palm Oil Price Trend, Analysis and Forecast

In the first quarter of 2024, Palm Oil prices witnessed a sharp increase owing to the production disruption in the key producing region of Southeast Asia. In Indonesia and Malaysia, Palm oil production has been hit hard by extreme weather and logistical issues leading to a drop in production by 2 million metric tons. Palm oil prices were further exaggerated by firm demand sentiment in the global market from crucial sectors including the food industry. Meanwhile, the biodiesel sector is experiencing a slight 1.5% decline in demand due to changing energy policies and a shift towards alternative fuels. The Palm oil market faced tight supply and inclined prices during the first three months.

In the first half of Q2 2024, the palm oil market continued to struggle with ongoing production challenges caused by extreme weather and logistical disruptions.

Palm oil prices – increase production constraints persisted, despite these issues, the demand for palm oil from the food industry stayed strong, with a 3% increase in processed food consumption. In May 2024, Palm oil prices stabilized as the supply dynamics strengthened in the Southeast Asian market. Production rates improved with increased volume available in the market easing the pressure from the Palm oil prices in Indonesia and Malaysia.

In the third quarter of 2024, the Palm oil market is seeing upward price pressure due to the tight supply situation coupled with steady demand from the food industry. The market remains sensitive to global supply chain disruptions, including those related to transportation and export restrictions.

As of August 2024, Palm oil prices are experiencing significant fluctuations, currently averaging around USD/MT 700 per metric ton, reflecting a 7% increase from the previous month. This price movement is attributed to many factors affecting supply and demand dynamics.

Looking ahead to the fourth quarter of 2024 and beyond, there are expectations for a partial recovery in production as weather conditions stabilize and labor issues are addressed. However, the Palm oil market is likely to remain volatile through 2030. Factors such as ongoing climate change impacts, changes in trade policies, and evolving consumer preferences towards sustainable and alternative oils will influence price fluctuations and market stability.

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is your trusted resource for tracking global palm oil price trends. Our platform delivers real-time data and expert analysis, offering deep insights into the key factors driving price fluctuations in the palm oil market. By monitoring critical events such as geopolitical tensions, supply chain disruptions, and economic shifts, keeps you fully informed of market dynamics.

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Track 's palm oil price assessment on a weekly basis since 2015 onwards, along with short-term forecasts, and get access to the detailed report in a downloadable format.

Historically, several events have caused significant fluctuations in palm oil prices

1.Adverse Weather Conditions (2019-2020)

The El Niño weather pattern hit hard between 2019 and 2020, bringing droughts that crippled palm oil production in key countries like Indonesia and Malaysia. With crops suffering from lack of water, yields dropped, leading to a noticeable spike in palm oil prices due to the shortfall in supply.

2.COVID-19 Pandemic (2020-2022)

When COVID-19 swept across the globe, it did not just affect health—it also disrupted supply chains everywhere, including in the palm oil industry. Plantations and mills faced labor shortages due to lockdowns and travel restrictions, which meant fewer workers to harvest and process palm oil. The disruption caused significant price swings as production slowed down.

3.Environmental Regulations and Sustainability Concerns (2020-2023)

In recent years, palm oil has faced increasing pressure from international regulators due to its environmental impact, particularly deforestation. The European Union, for example, imposed stricter rules on the sourcing of palm oil, which affected trade and caused price shifts. At the same time, the push for more sustainable palm oil practices has raised production costs, also influencing market prices.

4.Trade Tensions and Export Restrictions (2021-2022)

In 2022, Indonesia temporarily banned palm oil exports to stabilize domestic prices, leading to major disruptions in the global market. This move, meant to ensure local supply, caused a surge in international prices, and added to the volatility. Trade tensions between producing countries and major importers also played a role in price fluctuations.

5.Shift Towards Alternatives (2023-2024)

Recently, consumers have started leaning towards more sustainable and plant-based alternatives to palm oil. Driven by health and environmental concerns, this shift in preference has dented the demand for palm oil, affecting its market share and prices. The industry is feeling the impact as it tries to adapt to these changing consumer trends.

Methodology and Specifications

palm oil Pricing Assessment Research Methodology

Data Collection and Sources

Real-Time Market Data: aggregates real-time pricing data from a diverse range of sources, including global commodity exchanges, industry reports, and proprietary databases. This guarantees that our evaluations accurately represent the latest market trends and conditions.

On-the-Ground Intelligence: Our team gathers insights directly from key market participants, including producers, suppliers, traders, and end-users, across major palm oil production hubs. This ground-level intelligence is crucial for understanding localized market dynamics.

Supply Chain Monitoring: We track the entire palm oil supply chain, from production and distribution channels. This includes monitoring feedstock prices, production capacities, and transportation logistics.

Event Tracking and Impact Analysis

Geopolitical Tensions: continuously monitors global geopolitical developments, such as conflicts or trade disputes, which can significantly impact palm oil prices. Given the global nature of palm oil production and its heavy reliance on specific regions, any political instability, sanctions, or trade barriers can disrupt supply chains. These disruptions can lead to immediate price fluctuations and long-term shifts in market dynamics, affecting everything from production costs to the availability of palm oil in international markets.

Natural Disasters and Climate Events: We assess the impact of natural disasters, such as floods or droughts, on palm oil plantations and production facilities, particularly in vulnerable regions like Southeast Asia. These events are factored into our price forecasts and supply outlooks, given the significant role they play in palm oil production.

Economic Shifts: evaluates macroeconomic trends, including global economic growth, inflation rates, and sector-specific demand (e.g., food processing, cosmetics, biofuels), to predict shifts in palm oil demand and corresponding price movements.

Production Capacity and Supply Analysis

Current Production Monitoring: We maintain a comprehensive database of global palm oil production facilities, tracking their operational status, maintenance schedules, and output levels. This allows us to assess current supply availability accurately.

Future Capacity Projections: Our research includes detailed forecasts of the upcoming palm oil production areas; this helps in predicting future supply trends and potential price stabilization.

Demand Forecasting

Sectoral Demand Analysis: provides in-depth analysis of demand trends across key sectors, cooking oil, processed foods, personal care products, and household cleaners. We track year-on-year demand growth and project future consumption patterns based on economic indicators and industry developments.

Global Demand Dynamics: Our methodology considers regional demand variations and how they influence global palm oil pricing. This includes understanding the impact of shifts in manufacturing bases, trade policies, and environmental regulations.

Pricing Model Development

Dynamic Pricing Models: utilizes advanced econometric models to forecast palm oil prices, incorporating real-time data, historical trends, and projected market conditions. Our models are continuously refined to enhance accuracy and predictive power.

Scenario Analysis: We conduct scenario-based assessments to evaluate potential future market conditions. This includes best-case, worst-case, and most likely scenarios, helping our clients prepare for a range of market outcomes.

Reporting and Client Support

Comprehensive Reports: Our clients receive detailed reports that include current price assessments, future price forecasts, and in-depth analysis of market drivers. These reports are designed to be actionable, providing clear insights and recommendations.

Ongoing Support: offers continuous updates and personalized support to our clients, ensuring they have the most up-to-date information to make informed decisions. Our experts are available to discuss specific market developments and provide tailored advice.

This research methodology ensures that delivers the most accurate, timely, and actionable palm oil pricing assessments, helping our clients stay ahead of market trends and make informed business decisions.

Specifications

Molecular Weight[g/mol]

847.78

CAS No

8002-75-3

HS Code

151110

Molecular Formula

CH3(CH2)14COOH

palm oil

Packaging Type

Flexi Bag

Grades Covered

Crude Palm Oil, Palm Kernel Oil

Incoterms Used

FOB Johar, CIF Rotterdam, FOB Jakarta, CIF Shanghai, CIF JNPT, CIF Houston

Synonym

Palm Oil

Quotation Terms:

20-25 MT, 25-28MT (USA)

Ex-Location: This incoterm refers to a shipping agreement where the seller makes the goods available at their premises, and the buyer is responsible for all transportation costs, including shipping, insurance, and any other fees.
CIF: CIF refers to the Cost, Insurance, and Freight (CIF) terms for goods. Under CIF terms, the seller is responsible for the cost of goods, insurance, and freight charges until the goods reach the port of destination.
FD: FD stands for Free Delivered where the seller takes full responsibility for delivering goods to the location/port. This ensures the buyer receives the goods at the designated port with all necessary costs, except import duties, covered.
FOB: FOB refers to the Free On-Board shipping term, where the seller is responsible for the cost and risk of delivering the goods to the port. Once the goods are on board the vessel, the responsibility shifts to the buyer for all costs, including shipping and insurance.

Property	Specification
Physical state	solid
Colour	light yellow
Odour	odorless – characteristic
pH (value)	not applicable
Melting point/freezing point	25 – 40 °C
Initial boiling point and boiling range	>350 °C
Flash point	>300 °C
Flammability (solid, gas)	This material is combustible, but will not ignite readily
Vapor pressure	<1 mbar at 20 °C
Density	0.88 g/cm³ at 20 °C
Dynamic viscosity	25 cP at 50 °C
Solvent content	100 %
Solid content	100 %

Applications

Palm oil is used in cooking oil, processed foods, personal care products, and household cleaners. It is also found in biodiesel, lubricants, and animal feed. Despite its versatility, it faces environmental criticism, prompting moves towards more sustainable practices.

Disclaimer

Palm Oil price provided by is a base price and excludes VAT/Taxes, discounts, or offers. The information herein is accurate to the best of our knowledge as of the date indicated and is provided solely for the convenience of our customers as a reference for palm oil. disclaims any warranties or representations regarding the accuracy of results derived from this information. It is the sole responsibility of the user to assess the suitability of the product for their specific application. This document does not constitute an endorsement to use the product in violation of any applicable patent rights.

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Frequently asked questions

What factors influence the pricing of palm oil? +

The pricing of palm oil is influenced by several key factors, including global demand and supply dynamics, production costs, and weather conditions. Fluctuations in crude oil prices also play a role, as palm oil is often used as a biofuel. Additionally, trade policies, tariffs, and the economic situation in major producing countries like Indonesia and Malaysia can significantly impact palm oil prices. Understanding these factors is essential for procurement heads to make informed purchasing decisions.

How can procurement heads forecast palm oil price trends? +

Procurement heads can forecast palm oil price trends by analyzing historical price data, monitoring global supply and demand, and considering external market influences such as currency fluctuations and geopolitical events. Engaging with industry reports, subscribing to market analysis services, and leveraging insights from agricultural experts can also aid in creating accurate forecasts. This proactive approach allows for better planning and budgeting in procurement strategies.

What are the implications of sustainability certifications on palm oil pricing? +

Sustainability certifications, such as RSPO (Roundtable on Sustainable Palm Oil), can affect palm oil pricing. Certified sustainable palm oil may command a premium price due to the growing demand for environmentally friendly products. For procurement heads, understanding the implications of these certifications is crucial, as they align with corporate sustainability goals and consumer preferences. While the initial costs may be higher, sourcing certified palm oil can enhance brand reputation and open new market opportunities.